Civitas Review

Legislators Reach Deal on Medicaid Reform; Will Expansion Follow?


As the state budget deal received final approval in the House and moves to the Governor's desk, another major issue is apparently being settle. Per WRAL  

House Bill 372 will convert Medicaid from a fee-for-service program to a managed care model, in which insurers are paid a flat fee per patient they cover. The move is a bid to control costs, which Republican lawmakers said have too often absorbed money that could be put toward education and other needs.

North Carolina will need permission from the federal government to make all of these changes. Although state agencies are directed to apply to the federal government for the transition in the middle of next year, lawmakers say the expect the actual transition process to take about two or three years.

"I would be shocked if that process takes less than 12 months," said Rep. Donny Lambeth, R-Forsyth.

More likely, Lambeth said, it will take 18 to 24 months to wrangle federal approval.

The key compromise was allowing both big for-profit managed care insurers as well as locally created provider-led entities to care for patients. Provider-led entities are groups created by doctors, hospitals and other health care providers.

There will be three statewide slots that could be filled by either kind of insurer. The state will also be carved into six or seven regions. Only provider-led entities could sign up to care for patients within those regions.

Patients will be able to choose whether they want to have their health care managed by one of the statewide groups or one of the regional entities.

The media has been using the term "privatization" of Medicaid. Make no mistake, this move is not true privatization. True privatization would be the elimination of Medicaid – removing government from the provision of health insurance for low income people.

Moreover, as the new reform takes hold, will North Carolina begin to consider Medicaid expansion? As Gov. McCrory said in July 2014: “I’m leaving that door open. Once we fix the current system, I have not closed that door as governor.”

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