May 26, 2015

George Will says big government drives the power and wealth of insider lobbyists. The more power and money is concentrated in the hands of politicians, the more wealthy interests need to hire connected lobbyists to get their slice of the pie.

Nowhere is this more obvious than the Medicaid reform battle unfolding in Raleigh right now. The managed care companies have hired their lobbyists to try to get a piece of the Medicaid management contract. On the other side, Community Care of North Carolina, the organization that has a monopoly on Medicaid now, has hired lobbyists to keep their lucrative business all to themselves.

There is no competition. And the taxpayers pay through the nose.

We have advocated for competition between managed care companies (who run Medicaid in 39 states) to compete with the monopoly called CCNC.

Of course, that doesn’t make us popular with CCNC. The grapevine claims they have hired a blogger to make their case and he began by calling us liars. But if you’re not getting called names, you aren’t doing anything in the world of politics.

Here are the Medicaid spending numbers we have been using so everyone can see them.

Total Medicaid Spending (Federal and State Funds)
2009 $12.6 billion
2010 $12.8 billion
2011 $13.3 billion
2012 $14.2 billion
Source State Auditor 2013 Audit

Medicaid Budget (State Funds)
2008 $3.2 billion
2009 $2.7 billion
2010 $2.4 billion
2011 $3.0 billion
2012 $3.1 billion
2013 $3.5 billion
2014 $3.7 billion
Source General Assembly Website

State Medicaid Percent of Total State Revenue
2008 13.0%
2009 12.8%
2010 10.4%
2011 11.6%
2012 15.3%
2013 14.1%
Source Pew Charitable Trust

If we look at the work of the University of Virginia and Moody’s Analytics, the picture is even worse than what we see in state sources. They say actual state funded Medicaid was $4.5 billion or 14.9% of the budget in 2013 and $4.8 billion or 15.5% in 2014. And they say that without reform, North Carolina will spend $8.5 billion or nearly 17% of the budget on Medicaid in 2024.

The incumbent Medicaid contractors at CCNC spent $208,000 on lobbying in 2012 according to their IRS form. Since the law defines lobbying in a narrow sense, it might be a lot more. For example, they retained the firm of former Secretary of Health and Human Services Lanier Cansler for $130,000 to do something and we are certain it’s not related to treating patients. And now rumor has it CCNC added a blogger to the payroll and maybe we can confirm it one day.

One way or another, taxpayers pay the fees for all sides in the Medicaid lobbyist war. Anyone with experience paying medical bills knows the medical industry can inflate charges faster than Tom Brady can deflate a football.

We think taxpayers ought to have a lobbyist in the Medicaid fight. Republican Legislators ought to be the spokesman for taxpayers because the managed care companies and CCNC have the lobbyists on the payroll already.

NCDHHS should open up Medicaid management to competition between CCNC, managed care companies and whoever else wants to bid. The best quality at the best price should be the goal.

Open competition is the way to save the taxpayers.

The Carolina Partnership for Reform will continue our campaign for smaller government, individual freedom and personal responsibility. And we’ll enjoy the fight with our sharp tongued adversaries at CCNC.