Editorials

Feds should reject NC’s request to privatize Medicaid

North Carolina Governor Pat McCrory touts the new Medicaid privatization legislation before signing it into law during a ceremony at the Executive Mansion. The state has asked the federal government to approve the proposed Medicaid changes.
North Carolina Governor Pat McCrory touts the new Medicaid privatization legislation before signing it into law during a ceremony at the Executive Mansion. The state has asked the federal government to approve the proposed Medicaid changes. rwillett@newsobserver.com

The Republican-led General Assembly has a long list of actions that compete for the title of most outrageous, but there’s no contest in choosing the one that ranks as most mysterious. That is the unwavering commitment of Republican leaders to changing the state’s Medicaid system.

After winning control of both the state Senate and House in the 2010 election, Republican leaders immediately set their sights on “reforming” Medicaid. Ostensibly, the objective was to make Medicaid costs predictable year to year and to hold down the overall cost of the health insurance program which is the state’s second largest expense after education.

The proposed changes call for Medicaid to be managed, at least in part, by private companies, but the reasons for the changes are melting away. Medicaid costs are coming in under budget and the non-profit that oversees much of the program, Community Care of North Carolina, has had remarkable success in finding ways to save money and improve health care for children, pregnant woman and disabled people who are covered by the state-federal health care program.

Nonetheless, legislative leaders and Gov. Pat McCrory have asked the federal government, which pays about two-thirds of Medicaid costs, to grant a waiver that will allow the program’s funding to be allocated to health care companies and groups run by health care providers. Community Care’s role under that proposed arrangement is uncertain, but in dealing with multiple payers its efforts to promote efficiency and effectiveness would certainly be made more difficult.

The federal Centers for Medicare and Medicaid Services should reject North Carolina’s request for major changes in how it administers the $14 billion program. Per-patient costs under the current system are flat – a rare stability among Medicaid programs. Meanwhile, handing private companies billions of dollars in taxpayers’ money will encourage the rationing of services, burden providers with a confusing payment system and could reduce the quality of health care.

Adding to mystery of the proposed changes is why North Carolina leaders think the federal government will grant a waiver to a state that has refused to expand Medicaid under the Affordable Care Act. Apparently, they’re betting on having a President Trump.

Whatever the opaque motives for the waiver request, the federal response should be crystal clear: no.

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