House agrees to fill Medicaid funding gap

Posted May 23, 2012

N.C. Department of Health and Human Services

— The House on Wednesday approved a $205.5 million bailout for the state Medicaid program, which has seen a deficit balloon in recent months as administrators tried to make budget cuts that lawmakers called for last year.

The Senate passed the budget fix last week and will need to approve a minor change adopted by the House before the legislation can be sent on to Gov. Beverly Perdue to be signed into law.

About $125 million of the bailout money is coming out of the state General Fund, and the Department of Health and Human Services is supplying another $60.5 million. The rest would come out of the state repairs and renovations fund.

Bailout ends finger-pointing over Medicaid deficit Bailout ends finger-pointing over Medicaid deficit

The Medicaid fix passed unanimously in the House and Senate, a huge change from the months of political finger-pointing over the funding gap.

Republicans accused Perdue's administration of failing to fully account for all of the program's financial obligations. Meanwhile, Democrats said Republicans overestimated the amount of savings they would achieve with last year's budget cuts.

The Medicaid deficit could run as high as $250 million, but House Budget Chairman Nelson Dollar said he thinks the bailout will be enough.

"We have sufficient money to fund our Medicaid program through the end of the fiscal year," said Dollar, R-Wake.

The House tacked a provision onto the bill that would prevent North Carolina prison officials from privatizing inmate medical care for all of the state's adult prisoners unless they get the express approval of the legislature.

The state Department of Public Safety unveiled earlier this month a request for proposals from companies interested in taking over the health services.

The State Employees Association of North Carolina has criticized the privatization effort, saying it hasn't worked in other states and could affect 2,000 workers.

Department spokeswoman Pam Walker said agency leaders believed the legislature had given it authority to seek proposed contract bids to research whether privatization made sense.


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  • Worland May 23, 2012

    Down in Florida, many cities have privatized everything from water works to city park clean up. End result? They save millions every month and the public has never been happier with the quality of the services they receive.

    The military has saved billions contracting out basic services. No healthcare costs, no housing costs, no food costs and no long term retirement to pay. The quality of the civilian gate guards on bases is superb compared to our troops which are mostly over-burdened teenagers living below the poverty level.

  • KBUT1 May 23, 2012

    For-profit prison operation of any type is undoubtedly one of the worst ideas to come down the pike. The goal of these companies is not to provide security for the public, or rehabilitation for inmates, but it is to make money. As such, there will always be corners cut that ultimately work to the detriment of good prison management. The operation of prisons, including providing constitutionally adequate health care, is the state's responsibility and it should not seek to duck that simply because some of these private companies are undoubtedly lobbying for it (and likely laying out large "donations" to officials).

  • smalldogsrule May 23, 2012

    Privatization of government services will ultimately lead to a greater expense. There is a profit motive behind private companies. Anything and Everything involving prisons and law enforcement should be handled by the government.

    Privatization is what makes our federal defense budget so bloated.