July 21, 2015

A Kentucky Republican Senator calls it a ” monstrous hole ”.

A New Mexico Democrat says “The most vulnerable of our citizens — the children, our senior citizens, our veterans, individuals with disabilities — I get concerned that those could be areas that get hit.”

They are among Legislators in fourteen Medicaid expansion states wondering where the matching funds are going to come from with costs exploding past estimates. The AP reports ”More than a dozen states that opted to expand Medicaid under the Affordable Care Act have seen enrollments surge way beyond projections, raising concerns that the added costs will strain their budgets when federal aid is scaled back starting in two years.” (WRAL)

Standard and Poor’s warns something has to give. “In those states that do have budgetary balance, it’s somewhat tenuous,” said credit analyst Gabriel Petek with Standard & Poor’s Ratings Services. Add the cost of rising Medicaid enrollments and “something has to give. Most likely, it means they have to spend less in other areas or they have to increase their tax revenues.”

Standing up to massive pressure, Governor McCrory and the new majority in the Legislature have kept North Carolina out of this mess. Now they must work together to fix Medicaid so the double digit biennial cost increases don’t eat the rest of the budget. A fixed price Medicaid contact and competition between managed care companies and provider led entities seems a good plan to get Medicaid going in the right direction.