Blog

Medicaid for sale

Medicaid.jpgAfter much faux anticipation, Governor McCrory unveiled his long-awaited plan to overhaul North Carolina’s Medicaid system.

Kinda.

I say kinda, because there were remarkably few details included either in the press conference or in the accompanying documentation. It’s a bit tricky to understand what exactly is going on if you read the info on its face, because McCrory has veiled his plan with industry terminology, so I’ll try to translate for you.

The new program, dubbed the “Partnership for a Healthy North Carolina” is, indeed, a partnership. It takes our traditional Medicaid system and privatizes it, splitting Medicaid recipients among “three-ish” (Secretary Wos’ word, not mine) “managed care entities” (private insurance companies). These insurance companies would be paid on a flat per-person basis, and a new enrollee would be given the choice between one of the three-ish (doesn't that word inspire confidence?) plans offered.

The idea is that the magical force of competition will encourage these three-ish insurance carriers to compete amongst themselves for the majority of Medicaid dollars, hence building in an incentive to keep costs as close to the reimbursement at possible. This then insulates the state from cost over-runs and allows a more predictable budgeting process, while giving Medicaid recipients more choice, says the Governor.

Sound pretty reasonable, right?

Maybe, except for one thing: we are funneling hundreds of millions of public money into private, for profit, insurance companies! The entire reason McCrory says he is doing this is to reduce, what he calls, the “enormous” administrative costs in the current Medicaid system, but the only reason he knows what those costs are is because the state runs the program. Private insurance companies are notoriously awful at controlling administrative bloat, so this program would merely mask any problem in that area. Plus, insurance companies have an additional cost that our traditional Medicaid system does not – profits.

We are still waiting for the details of this plan to emerge, and we have significant concerns about how much disclosure recipients will get about each plan, what happens when a procedure is deemed medically necessary but not covered by the plan, and how enrollees can change from one plan to another. But from what we seen now, one could scarcely imagine a Medicaid system friendlier to the insurance industry and less friendly to those on the Medicaid rolls.

But we’re sure McCrory has the taxpayers’ best interests at heart. Kinda.