House agrees to fill Medicaid funding gap

Posted May 23, 2012 2:51 p.m. EDT
Updated May 23, 2012 6:47 p.m. EDT

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.

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.