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Managed Care Postponed Indefinitely: Budget Overflow Possible

It has been over eight months since Gov. Roy Cooper vetoed the General Assembly’s biennium state budget. This veto has left funding for many programs tied up for months on end. One such program is North Carolina’s transition to Medicaid managed care. As our Joe Coletti writes in his research brief this week:

While getting finances under control, McCrory and the Republican-led General Assembly set Medicaid on a path to move from fee-for-service to managed care this fiscal year. Gov. Roy Cooper’s budget veto delayed the transition. Secretary of DHHS Mandy Cohen confirmed in November that managed care, even value-based care, was not as important as Medicaid expansion and halted activity on implementation indefinitely.

This delay may have serious consequences. In the past, North Carolina has routinely gone over its Medicaid budget by as much as $500 million. Managed care could potentially rein in costs and establish greater budget security by contracting out the coverage of Medicaid populations at a set amount. Without a budget, however, Medicaid will not be able to make this transition. But it doesn’t appear we will have a budget compromise any time soon. Coletti explains:

With a recent federal court decision quashing the false hope that Medicaid work requirements would stick, Republican legislators have given up on finding a compromise. John Hood declared that Medicaid expansion is dead unless and until Democrats gain a legislative majority.

This issue should be of much concern to anyone interested in keeping our state’s budget balanced. Coletti writes:

Medicaid’s $3.9 billion in state appropriations is second only to public schools and touches 500,000 more lives than the schools do. When adding in federal and other sources of funding, the program accounts for one-fourth or $14 billion of the $55 billion North Carolina state government budget. A small mistake in Medicaid can cost more than other state agencies spend in their entirety. It is essential for this program to operate within budget.

Read the full brief here. Learn more about managed care here.

Brenee Goforth / Marketing and Communications Associate

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