Medicaid shortfall larger than expected

Posted May 2, 2013

Secretary of Health and Human Services Aldona Wos, right, and Carol Steckel, director of the state Medicaid program

— The chronically troubled state health insurance program for the poor and disabled has discovered another budget shortfall, which will squeeze an already tight state budget and could eat up any revenue windfall from better-than-expected tax collections. 

Officials with the Department of Health and Human Resources had earlier this year estimated that the state's Medicaid program would be $113 million over budget. Thursday, they announced the department would be short an additional $135 million. Combined with a "rebase," or an estimate of how much actual costs are growing year to year, the program will cost at least $434 million more in fiscal year that begins July 1 versus the current fiscal year.

"We have been taking a close look at previous Medicaid forecasting practices in order to create a more transparent and accurate process going forward," DHHS Sec. Dr. Aldona Wos said. The department recently hired Ernst & Young to conduct an in-depth evaluation of Medicaid forecasting methodologies in the Division of Medical Assistance. The agency has also hired former State Auditor Les Merritt to help with oversight of the department. 

This new shortfall is a result of a problem with the model the state uses to predict how much money the federal government will send to North Carolina for Medicaid expenses, according to the agency. The state and federal governments share costs for the program. 

Of immediate concern, the over-estimate of how much money might be forthcoming from the federal government will force lawmakers to plug a hole in the current year's budget before July 1.

"If the shortfall is as big as DHHS has modeled, we'll have to do something," said Sen. Pete Brunstetter, R-Forsyth. Lawmakers have already begun planning to plug that hole by filing a "placeholder" bill that could be used if action is needed.  

The good news, said Brunstetter, the senior budget chairman in the Senate, is that lawmakers were already expecting a larger shortfall than previously forecast. That means today's announcement won't derail plans to roll out the state budget this month. 

"These numbers are a little bit higher than what we anticipated, but not dramatically so," Brunstetter said. 


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  • Captain_Vlad May 2, 2013

    If you think it's bad with new shortcomings and complaints coming out of DHHS now, just you wait until 50% or more of their employees quit in the coming summer months and there is no one there to timely accomplish the work that MUST BE DONE. Everyone I know who works under the whip of those two "Political Crony Queens" are actively looking to leave. I guess once you've been advised that the Division is selling it's soul to privatize why hang around? Oh and watch the republicans do exactly what they accuse Obama of doing... blame the administration before them for everything that turns to feces. That's called cowardice and both parties do it every opportunity they get. Privatizing the medicaid system is a horrid idea that has fallen on it's face in other states time and again. Yet, the GOP still swears "Corporate America" can solve the problem. Their answer to solving the problem... "no funds no healthcare, just die so we who can afford life can move on."

  • HeadsUp May 2, 2013

    The department that can't do anything right. So, definitely, they should lauch a new Medicaid payment computer system that their own consultant said in February didn't work. Brilliant.

  • Gary_too May 2, 2013

    It must be George Bush's fault? That works for Obama every time.

  • weasel2 May 2, 2013

    Time to check where all the money went that supposedly had it covered under the Perdue administration.

  • LuvLivingInCary May 2, 2013

    somethings not adding up here...when a service is deemed to be one that the federal government will pay in full then the bill to the feds is passed along and they send the money to the NC government to write the checks to the providers.

    sounds to me like they thought a procedure would be covered by the feds and it really isn't. send in the auditors again.

  • BaseBallMommy May 2, 2013

    Do they ever think it won't have a short fall? When you continue to pay for women to have children and not pay a penny towards it then provide health care for the baby(ies) then you will always lose money. Do something to stop people from continuing the cycle!!!