From the Editor

Drescher: Medicaid drama plays out at Legislative Building

jdrescher@newsobserver.comJuly 11, 2014 


N.C. Gov. Pat McCrory, with Aldona Wos, secretary of health and human services, promised Medicaid reform. Two managers recruited by Wos have left, and the agency now relies on contractors.


With apologies to the performances at various Triangle venues, the most compelling theater in recent weeks (in a car-wreck-about-to-happen sort of way) has been the melodrama at the Legislative Building on Jones Street.

The House and Senate, which are controlled by Republicans, cannot agree on spending for the budget year that began July 1. Senate negotiators walked out of a session Wednesday as some legislators threatened to stay until Christmas. When legislators returned, there was a Christmas wreath on the podium, stockings at the senators’ seats and lumps of coals on the desks of the representatives.

We should have assigned our theater correspondent Roy C. Dicks to review the show.

Among the major sticking points has been how to rein in Medicaid costs. Not many years ago, Medicaid spending drew little attention, and lawmakers from both parties voted to expand the program to attract more federal dollars. But costs have risen so fast that Medicaid now consumes nearly 20 percent of the state’s $21 billion annual budget, Lynn Bonner and Joseph Neff reported in The News & Observer last weekend.

Medicaid isn’t the world’s sexiest subject. But given how costs have risen and the legislative battle over what to do about it, we thought we should explain what the drama was about. Our two-part report, “Critical Condition: The Trouble With Medicaid,” was part primer and part exposé showing how the McCrory administration has struggled to manage the program effectively.

If you missed the report, you can read it at

Here are five key points:

1 Most people know Medicaid as the government health-insurance program for poor children and their parents. And it is that. But that’s not the most expensive part of Medicaid. In North Carolina last year, Medicaid spent $3.7 billion on 1.5 million parents and children. But it spent $6.6 billion on 540,000 elderly, blind and disabled people. Some Republicans say Medicaid is welfare; other Republicans reject that characterization and say it helps people with a variety of health issues.

2 State legislators have good reason to be concerned about the growth in Medicaid funding. Two-thirds of Medicaid is paid by the federal government and the rest by the state. Still, state Medicaid spending rose 80 percent from 2004 to 2013 – more than twice as fast as overall state spending.

3 There are some bright spots. Medicaid costs per person served in North Carolina have declined by 11 percent since 2008 compared with a nationwide increase of 6 percent during that period. After several years of budget overruns, state Medicaid funding appeared to be within budget for the year that ended June 30. Physician networks that provide care to Medicaid patients in North Carolina score well in treating several illnesses.

4 The state office that runs the Medicaid program is in disarray. Two experienced Medicaid managers departed soon after they arrived. As of June 1, a quarter of the 332 jobs in the division were vacant. The agency relies on contractors chosen without competitive bids and without significant Medicaid experience.

5 Gov. Pat McCrory, who took office in January 2013, repeatedly said last year that the state’s Medicaid program was “broken.” Now he says that a better way to put it is that “the system is not sustainable for the long run.” Running the Medicaid program is a humbling experience, as recent governors discovered. McCrory won’t be able to blame his predecessors forever. He has less than two years until his re-election campaign begins. Whether he can improve Medicaid will make for a compelling drama.

Drescher: 919-829-4515 or; Twitter: @john_drescher

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