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Truth gets stretched in Medicaid debate

February 17, 2013 

The ancient Greek poet and playwright Aeschylus said, “In war, truth is the first casualty.”

More than 2,500 years later, he’s right about political wars, too. The recent debate over expanding Medicaid in North Carolina has featured two examples of the truth going down early as political forces engaged.

The first originated with the woman who prides herself on being the state’s official straight shooter, State Auditor Beth Wood. Now in her second term, Wood has shown herself to be sharp-eyed when it comes to scrutinizing the finances of state agencies. But she needs a new set of glasses when it comes to seeing political motives. A Democrat, she let herself get played for political purposes by Republicans.

Wood accepted an invitation from Republican Gov. Pat McCrory and his new Secretary of Health and Human Services Aldona Wos to attend a Jan. 31 news conference at DHHS to discuss Wood’s recent performance audit of the agency’s Division of Medical Assistance. The division handles Medicaid, the joint state-federal health insurance program for low-income people.

The three of them took turns going over how the state’s Medicaid program was $1.4 billion over budget in 2012, the same in 2011 and even more in 2010. Wood said her audit turned up a lack of proper budget forecasting, financial controls and other procedural gaps.

The auditor didn’t say Medicaid money had been misspent – she evaluated processes, not expenses – but McCrory had what he needed: political cover. The governor had earlier expressed reservations about plans in the Republican-controlled General Assembly to refuse billions of federal dollars for an expansion of Medicaid to cover an estimated 500,000 low-income North Carolinians.

Conservatives don’t want any part of “Obamacare,” so McCrory, seeing a chance to please the right and yet maintain his moderate image, seized on the audit. Not long after the news conference, he announced that he’d like to help the uninsured working poor, but he just can’t.

“I’ve talked to governors throughout the nation who have both accepted (Medicaid expansion) and rejected it,” the governor told WRAL. “One thing I’ve learned is each state is different, and one thing that’s different in our state is our Medicaid system is broken. And I cannot expand a broken system.” And if you doubt it, he added, “We just received a state audit that showed our current system is broken.”

Except it’s not. The reason DHHS’ Medicaid spending continues to be over budget is because the Republican-controlled legislature reduced its budget without defining what to cut, such as payments to doctors and hospitals, services offered or the number of people eligible.

Apart from missing the General Assembly’s unrealistic savings targets, Medicaid delivery systems in North Carolina are very much intact. From 2007 to 2010, Medicaid spending in North Carolina grew more slowly than in any other state in the nation. One of its delivery models, Community Care, is a widely praised prototype for cost savings that other states want to copy. No doubt, a state division spending $13 billion in state and federal funds annually has things that could be fixed, but it clearly is not “broken.”

Adam Searing, director of the Health Access Coalition at the N.C. Justice Center, said Wood’s audit lent itself to political misuse by painting the state Medicaid division as if it had gone on a spending binge and wasn’t able to control itself. “That is not the case,” he said.

Meanwhile, in the state Senate, the poor truth – and the truth about the poor – was getting another session on the stretcher. Sen. Ralph Hise, co-chairman of the Senate Health Care Committee, and Senate President Pro Tem Phil Berger were citing a study put out by Harvard, Boston University and the U.S. Department of Veterans Affairs that they said showed expanding Medicaid wasn’t necessary. They said the study reported that 80 percent of the 500,000 people who would be newly eligible in North Carolina already have private insurance.

But the lead author of the study said that’s not accurate. Steven D. Pizer, an associate professor at the Boston University School of Medicine and director of Health Care Financing & Economics for Veterans Affairs, said in an email: “Although it’s true that Medicaid expansion nationally will result in substantial numbers of individuals moving from private to public insurance, in a state like North Carolina this will be much less of a problem.”

Pizer concluded that for low-income individuals with chronic health conditions, “The proposed Medicaid expansion would be an effective means to reduce uninsurance in this vulnerable population as well as among the low-income population more generally.”

The reasons for refusing to expand Medicaid don’t seem to be reasons at all. So why refuse? Perhaps old Aeschylus had it right again when he said: “Whoever is new to power is always harsh.”

Editorial page editor Ned Barnett can be reached at 919-829-4512, or nbarnett@newsobserver.com

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