State News

Perdue: Medicaid spending way over budget

Posted December 1, 2009 10:15 a.m. EST
Updated December 1, 2009 6:56 p.m. EST

— Gov. Beverly Perdue said Tuesday that North Carolina's Medicaid program is breaking the budget the legislature gave state officials this summer.

The government health insurance program for low-income children, older adults and the disabled was at least $150 million over budget through the first quarter of the fiscal year, Perdue said.

"It's a real struggle right now," Department of Health and Human Services Secretary Lanier Cansler said.

More people are enrolling in Medicaid as the unemployment rate stays high, Cansler said, and the state also has had to spend about $52 million in Medicaid money to respond to the swine flu pandemic.

The number of people expected to enroll in Medicaid this year will be about 18,000 more than state officials projected, he said. The average person receiving benefits is using 4 percent more services than budgeted, he said.

The enrollment and spending trends could require lawmakers to add $72 million to the budget, officials said.

Cansler said about half of the cost overruns are because of delays in federal approval of some cuts proposed by the state to save money.

"We're trying to reduce the budget by $1.5 billion in a year we would normally have grown the budget by $1 billion," he said.

Perdue said she plans to go to Washington, D.C., to look for financial help.

"We have consistently asked them to continue to hold the states harmless for Medicaid," she said.

If the federal government reduces its assistance to Medicaid next fiscal year, however, Cansler said it could cost the state another $500 million.

Medicaid recipient Teri Geraci said she's hopeful that the state can find the money to keep the insurance program running.

"It's essential. We wouldn't be doing OK without it," said Geraci, who fled New Orleans with her two daughters after Hurricane Katrina.