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Medicaid cap could net huge savings

RALEIGH – Help may be on the way….again.

At a Wednesday session in the state capital, nearly every member of the North Carolina House of Representatives signed on to House Bill 1424, which would permanently cap county Medicaid costs at 2005-06 levels and provide additional, targeted relief each year to counties with the highest percentage of Medicaid eligible citizens.

Here in the Roanoke-Chowan area where Medicaid eligibility runs extremely high, thus placing a huge burden on razor-thin budgets, the bottom line in savings is over $1 million.

The bill, introduced April 11, was sponsored by Reps. Bill Owens (Pasquotank), Mickey Michaux (Durham), Paul Stam (Wake) and Doug Yongue (Scotland). The proposed legislation calls for $100 million for 2007-08 and $154 million during 2008-09 to cap county Medicaid costs at 2005-06 levels.

Bertie County Manager Zee Lamb said the cap would help a great deal as he begins preparations for the county’s 2007-08 budget.

“This means a lot to Bertie County,” Lamb said. “If the legislation is approved, it will help us free up some money to use for education and other county services.”

Lamb said $90 million of the proposed $100 million for 07-08 would be divided among the state’s 100 counties. The remaining $10 million would be split among the counties, like Bertie, that are suffering the most from staggering Medicaid costs.

“We are three times higher than the state average when it comes to the number of our citizens eligible for Medicaid,” Lamb said. “It is unknown at this time what Bertie’s share would be of that $10 million. It all depends on how the state sets the criteria for that particular pot of money.”

Meanwhile, state officials are elated over House Bill 1424.

“This is the most significant piece of Medicaid relief legislation ever introduced due to the amount of relief involved and the overwhelming and bipartisan support of the legislators who have signed onto this proposal,” said North Carolina Association of County Commissioners (NCACC) Executive Director David F. Thompson. “By making the temporary cap that was enacted this year permanent, it provides substantial relief from the escalating Medicaid costs for all 100 counties. The proposal also provides some much-needed additional assistance for counties where the Medicaid burden is particularly crippling.”

R-C area counties have no control over mandated payments nor do they have a say in Medicaid eligibility. Medicaid consumes 25 percent of the annual budgets in Bertie, Hertford and Northampton counties. That leaves 75 percent of those respective budgets to fund the remainder of county-provided services n education, law enforcement, DSS, public health, recreation, etc.

Bertie (32.7 percent) and Northampton (32.1 percent) are among the top counties statewide in the number of citizens eligible for Medicaid. Hertford County (30.5 percent) is that far behind the leaders. Gates County, who commits 16 percent of its budget annually to Medicaid, lists an eligibility rate of 18.3 percent.

In dollars, Bertie committed $2.3 million to Medicaid during the 2005-06 budget year. That is projected to rise to $2.68 million in 2007-08. Without the proposed cap, Hertford County faces the steepest hike, going from an actual $2.17 million in 05-06 to an estimated $2.85 million in 07-08. Northampton County ($2.2 million) faces no projected increase while Gates County’s share of Medicaid payments will increase slightly from $624,331 to $787,882.

If House Bill 1424 is approved, it will mean a projected savings of $385,912 for Bertie; $673,419 for Hertford and $163,551 for Gates.

In 2005-06, North Carolina counties paid nearly $426 million to subsidize the state’s Medicaid share. State legislators did provide a one-time appropriation of up to $27.4 million in the 2006-07 budget to temporarily cap county Medicaid costs at 2005-06 levels, but a recent increase in Medicaid services costs means that counties may exceed the $27.4 million cap by at least $15 million.

If the cap is not continued, state officials are already projecting county Medicaid costs to surpass half a billion dollars in 2007-08. The latest projections from the Division of Medical Assistance show the county share is projected to jump to $517 million for 2007-08 n an increase of 21 percent over 2005-06 expenditures.

“County budgets cannot keep pace with the rapidly escalating Medicaid costs,” said NCACC President Terry Garrison, a Vance County commissioner. “Instituting a permanent cap means that counties will no longer be faced with funding the dramatic increases in a program over which we have no control. This will enable us to use our local tax dollars to meet our school construction and other infrastructure needs.”

A recent survey by the Department of Public Instruction revealed nearly $10 billion of school capital needs over the next five years.

“H1424 would permanently cap county Medicaid costs at last year’s levels and would provide additional relief for counties who are hardest hit by Medicaid,” said Rep. Owens. “This is a bipartisan effort. Very seldom do you see 119 members sign a bill. We had every person in the House to sign the bill, other than the speaker, who doesn’t sign bills. We only had one person out of 119 who was even reluctant to sign.”