House subcommittee endorses proposal for $65 million in county Medicaid relief for 2006-07, permanent cap

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The House’s Medicaid Subcommittee adopted a proposal March 28 that would use $65 million in state Medicaid savings to provide Medicaid relief for counties in 2006-07. In addition, the proposal calls for the provision of a permanent cap.

Rep. Edd Nye reviews the proposal with NCACC President Kitty Barnes. (Photo by Jason King)

Under the plan, $30.4 million would be used to cap county Medicaid costs at the 2005-06 level of $459.8 million. The additional $34.6 million would be used to provide targeted relief to all counties based on a counties’ percentage of Medicaid-eligible citizens.

Rep. Edd Nye (Bladen), who co-chairs the subcommittee with Rep. Beverly Earle (Mecklenburg), championed a proposal to use $65 million in Medicaid savings for county Medicaid relief.

“It’s time for us to do something. Time is growing short,” said Rep. Bill Owens (Pasquotank), who motioned that the subcommittee adopt the proposal as its recommendation to the House Select Committee on Health Care. The motion was seconded by Rep. Howard and passed unanimously.

NCACC President and Catawba County Chair Kitty Barnes and NCACC Executive Director David F. Thompson addressed the subcommittee members, while First Vice President Terry Garrison of Vance County, Third Vice President George Brown of Craven County, and Past President Breeden Blackwell of Cumberland County were also in attendance.

Barnes stressed that a cap would help all counties, especially those with fewer resources to manage escalating Medicaid costs, and that the targeted relief plan would lessen the “cliff effect” that is problematic in traditional targeted relief proposals.

“This does not penalize anyone sitting on the cusp of one of these levels,” Barnes said. “We believe targeted assistance can be funded.”

The targeted relief would work as follows:

• The 20 counties that have a Medicaid-eligible population of 25 percent or more would share 40 percent of the amount – or $13.8 million – to provide 18 percent in targeted relief.
• The 65 counties that have a Medicaid-eligible population between 15 percent and 25 percent would share 55 percent of the amount – or $19 million – to provide 6 percent in targeted relief.
• The 15 remaining counties, which have Medicaid-eligible populations of less than 15 percent, would share 5 percent of the amount – or $1.7 million – to provide 2 percent in targeted relief.

Members of the subcommittee were supportive of the proposal and of permanent Medicaid relief for counties.

“Frankly I think counties have done a yeoman’s job to come up with a recommendation that is palatable,” said Rep. Julia Howard (Davie). “I think it is a real good start.

“The cap certainly gives them leeway to do their budgets.”

Reps. Margaret Highsmith Dickson (Cumberland), Ray Rapp (Haywood), Ronnie Sutton (Robeson) and Trudi Walend (Transylvania) are also members of the subcommittee and voiced their support for the proposal.

“This sends a message to our county commissioners that we hear you and we want to take action,” said Rep. Rapp.

The $65 million is available because the state is saving more as a result of the new Medicare Part D prescription drug plan. Under Medicare Part D, citizens who are dually eligible for Medicare and Medicaid have all their pharmacy costs paid for under Medicare Part D, thus freeing up Medicaid dollars for county Medicaid relief.

Reps. Nye and Earle will report the subcommittee’s recommendations to the House Select Committee on Health Care on April 11. The committee is scheduled to meet at 10 a.m. in Room 643 of the Legislative Office Building.

The proposal, if introduced as legislation, would be eligible for consideration during the short session, which begins on May 9, because it would have an impact on the state budget.

“We look at this as a great interim solution,” Thompson said. “Once again, our No. 1 goal is to obtain Medicaid relief through a permanent cap of county Medicaid costs with targeted relief to counties with high Medicaid populations, and the eventual phaseout of the county share of Medicaid payments.”