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Research contradicts McCrory on Medicaid expansion

General Assembly researchers say the cost to administer the program is actually lower than most states.
November 20, 2013 11:53:01 AM PST
After taking office, Governor Pat McCrory made the convincing argument that North Carolina's Medicaid system was broken - citing at least $200 million in unexpected spending and an audit that showed the system was burdened with high administrative costs.

But in testimony before an oversight committee Tuesday, the North Carolina General Assembly Fiscal Research Division presented research that shows the state's Medicaid administrative costs are actually lower than many states.

In January, McCrory and State Auditor Beth Wood held a joint news conference - saying she found hundreds of millions of dollars in Medicaid cost overruns. The audit showed the state spends nearly 40 percent more than the national average just to administer Medicaid, and that's costing taxpayers an extra $180 million a year.

But the new research presented to the General Assembly panel Tuesday contradicts Wood's findings. Wood defended her audit to lawmakers.

"I have not seen anybody else extract and do these calculations for the purpose of determining administrative costs anywhere else across the United States. I'm not saying there's not anybody else, but we can't find anybody that reports this way," she offered.

Medicaid provides health coverage for more than 1.5 million North Carolina residents - most of them poor children, older adults and the disabled - and spends $12 billion in state and federal funds annually.

Governor McCrory used the audit as part of his justification for not to expanding Medicaid coverage in North Carolina - as called for under the federal Affordable Care Act - also known as Obamacare.

In response to this story Tuesday, a spokesperson for Governor McCrory told ABC11 that the discrepancy between Wood's numbers and the Fiscal Research Division is a conflict between them, and there are greater reasons to justify not expanding Medicaid in North Carolina.

"... the current system in North Carolina is broken and not ready to expand without great risk to the taxpayers and to the delivery of existing services to those in need. We must first fix and reform the current system," said Ryan Tronovitch.

A recent study estimated almost 320,000 low-income people in North Carolina would have benefited from the expansion - a 20 percent increase in current enrollment. The federal government would have paid in full for the expansion for three years, with the share falling over time to 90 percent. Still, the expansion likely would require the state to locate hundreds of millions of additional dollars over several years.

Tronovitch said Tuesday the potential long-term cost of an expansion couldn't be calculated based on data currently available from the federal government, and the ongoing budget battles in Washington make funding projections uncertain.

Governor McCrory's opponents - including Democratic Attorney General Roy Cooper, who's likely to challenge him at the next election - have charged the decision not to expand Medicaid was political.

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