Cuts to Medicaid and other safety-net services could be coming soon to North Carolina because of budget cuts in a stopgap spending measure that state lawmakers passed last week.
The measure, drafted behind closed doors by Republican legislative leaders, cuts tens of millions of dollars in funding for mental health and substance abuse services, as well as services for people with developmental disabilities.
Every year, state health officials have to adjust the Medicaid budget to account for rising costs, changes in the number of people enrolled, and other factors likely to affect the program’s cost for the upcoming year. The process is known as the Medicaid “rebase,” and it’s generally included in the state budget.
This year, Medicaid leaders — including N.C. Health and Human Services Secretary Dev Sangvai— said the rebase needed for the next fiscal year would be $800 million dollars. However, the spending bill supplies only $600 million, a 25% shortfall.
Gov. Josh Stein blasted the spending cut Tuesday at a monthly meeting of the state’s top executive-branch officers.
“It fails our Medicaid beneficiaries,” Stein said. "It helps fund part of the rebase, but it does not fully fund it, and there are going to be real consequences on human life because of that failure.”
When questioned about it during state House debate last week, House senior budget chairman Rep. Donny Lambeth said budget writers didn’t agree with Medicaid leaders’ projections.
“We've had staff scrub the numbers,” Lambeth, R-Forsyth, said. “We felt like at this point in our process, this was the best number we could go with, but we are continuing to look at the rebase number.”
Lambeth said changes to Medicaid at the federal level will require lawmakers to make changes at the state level, probably within the next few months. They could allot more money to the rebase then, he said.
“This gets them going,” Lambeth said. “It's something that they need, better than nothing. We will have to look at some reform within the Medicaid program. We are looking at enrollment, we're looking at rates, and there'll be more to come on that as we get into the fall.”
State Health and Human Services Secretary Dev Sangvai told WRAL in an interview Wednesday that the shortage of funding could mean cuts to services. He said the Department of Health and Human Services is working through different scenarios to see how the cuts can do the least damage.
More than 3 million North Carolinians rely on Medicaid services.
“In many cases, it makes a difference between living well, and in some cases, life and death,” Sangvai said.
Sangvai said he’s continuing to work with state lawmakers in both parties and both chambers. He said receiving more rebase funding later in the year would help. But the program can’t base its budget on that assumption.
“The longer you wait to know how much money you're going to have for the year, the harder it is to implement cuts later on,” Sangvai said.
“We want to continue to remember that at the end of the day, while what we're doing is sometimes a budget exercise, a numbers exercise, they’re real lives and real people who are being impacted by this,” he said.
WRAL News asked House Speaker Destin Hall, R-Caldwell, why lawmakers didn't fully fund the rebase up front, especially given the state's massive cash reserves. Hall's office provided the following statement:
"This fear mongering is disingenuous and unproductive," the statement reads. "While DHHS is claiming rapidly climbing costs, there is some disagreement on what the actual number will be in the end. Our members are also concerned we are seeing double digit increases in certain programs without any evident cost control or management.
"The $600 million we allocated will provide a stopgap while we continue to evaluate federal impact and see what next steps are. We will revisit the number once we have made those assessments and have a full budget.”
