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NC Senate Rejects Governor McCrory's Medicaid Overhaul

North Carolina General Assembly

Republicans in the North Carolina Senate have rejected Governor Pat McCrory's proposed Medicaid overhaul. Senate leaders proposed their own overhaul in the budget they released this week.

Why did Senate leaders reject the governor’s proposal?

It's all about cutting costs and establishing a predictable budget, and they don't think the governor's proposal goes far enough on those points. Large cost overruns have become an annual thing for Medicaid, to the point that Senate leaders now call it a "runaway" program.

McCrory's solution is for groups of doctors and hospitals to take more responsibility for managing the program and reining in costs.  This solution has the overwhelming support of the state's medical community, and it's an approach that is already saving money for the Medicare program, according to the federal government.  

What do Senate leaders want to do instead?

They want to eliminate eligibility for some people who are old, blind or disabled that the federal government says states don't have to cover. The budget estimates this would take about 15,000 people off Medicaid and save the state about $32 million.  

They also set aside money to create a new organization to oversee the state's Medicaid program. And here's where we enter a sort of Medicaid overhaul Groundhog Day:

Some Senate Republicans say they want to move toward a system where an insurance company – or something like it – is in charge of managing the program. You give them all the money up front. If they go over budget, they're on the hook. If they save money, they turn a profit. Either way, the state's budget is predictable.

That’s actually the first model Governor McCrory proposed. But after he rolled it out last year, the state's medical community made it clear they did not think it would result in better care, and then the House and Senate told McCrory to come up with a new plan. McCrory came up with that new plan (the groups of doctors and hospitals), but now the Senate is saying actually, we liked the original plan better. 

And where does the House weigh in on all this?

Representative Nelson Dollar plays a big role on these issues, and he helped the administration come up with the new plan. You can guess what he thinks about it. Some lobbyists I talked to today said other House members have also been supportive of the doctor-hospital approach. But we won't know for sure until they take up the budget next week.