Raleigh, N.C. — The Senate budget proposal released late Wednesday would bring major organizational and budgetary changes to the state Department of Health and Human Services.
The spending plan includes $4.9 million to create a new Medicaid center, with the intent to move the program out from under the agency in coming years.
Sen. Louis Pate, R-Wayne, said the center would conduct a nationwide search for leadership to manage the giant entitlement program.
"This is the first baby step along the way," Pate said Thursday.
The budget makes major changes to the state's Medicaid eligibility guidelines, cutting expenditures on coverage for the aged, blind, disabled and medically needy by more than $32 million – about half of the state's current funding for the program. (Federal money makes up the majority of its support.)
Under the proposed changes, 3,342 people now covered by Medicaid because they're medically needy, aged, blind or disabled would lose their coverage on Jan. 1. Another estimated 11,886 aged, blind or disabled people would lose Medicaid eligibility under county special assistance programs, which would be decoupled from Medicaid under the budget.
Currently, North Carolina's Medicaid coverage includes some options that are not required by federal standards, and it offers eligibility to more people than strictly required. Sen. Ralph Hise, R-Mitchell, said the changes would bring the state into line with programs in surrounding states.
"There are populations we serve that exceed the income requirements that we are required to serve under federal Medicaid," Hise said. "This is a cut in the population of Medicaid that we will serve."
Advocates for the disabled said they fear the impact the proposed cuts will have on North Carolina's most vulnerable residents.
"This budget is going to destabilize an incredibly fragile system in our state," said Julia Adams, assistant director of government relations for The Arc of North Carolina, which supports people with intellectual and developmental disabilities.
Hospitals and medical providers also would receive lower payments from the state for Medicaid services.
"The Senate’s budget proposal offers no solution to the big challenges we’re facing in Medicaid, Robert W. Seligson, chief executive of the North Carolina Medical Society, said in a statement. "Patient care under the Senate plan will suffer, especially for the aged, blind and disabled citizens of our state, who will no longer be eligible for Medicaid if the Senate has its way. Doctors want to deliver quality care within a rational structure that focuses on the health of their patients."
The Senate plan also cuts funding to mental health management entities by $60 million statewide and closes the Wright School in Durham, which serves children with behavioral and emotional disorders.
Funding for the home care and community block grant would drop by nearly $1 million.
Eligibility for subsidized child care would change as well. It's currently set at 75 percent of the state's median income, or $48,737 for a family of four. The Senate plan would restrict eligibility for children over 5 to families making no more than 133 percent of the federal poverty level, or $31,721.
The change would save the state about $22 million, half of which would be put back into the child care subsidy program, which has a lengthy waiting list. Co-payments would also increase slightly.
The plan also doubles state funding for Child Protective Services and includes an additional $1 million for the State Medical Examiner's Office.
DHHS spokesman Kevin Howell said the agency has been working for more than a year toward "a more sustainable and predictable Medicaid program that provides better health outcomes for North Carolina’ most vulnerable citizens. DHHS has taken steps to strengthen North Carolina’s Medicaid program and much-needed actions are already in place to address these long-standing issues."
"While serious questions remain about the Senate’s proposal, we look forward to continuing to work closely with legislators as the budget process moves forward,” Howell said.