State changes course on Medicaid. Good

Editorial by Fayetteville Observer, December 10, 2013.

It appears that Gov. Pat McCrory and some of his top managers are rethinking their plan to mend a "broken" Medicaid system.

That's good, because the system that administers the health-insurance program for low-income residents isn't all that broken. Part of the Medicaid administration, the nonprofit Community Care of North Carolina, is widely considered one of the most successful in the country. Other states routinely send their health-and-human-services managers here to check it out and try to copy it.

Community Care includes medical-provider networks that work to manage Medicaid patients' medical conditions and keep them healthier. Studies show that the system has saved hundreds of millions of dollars in the past few years.

It makes little sense to follow the administration's initial instinct to dump Community Care and turn Medicaid administration over to for-profit management companies.

Some legislators agree. That includes state Rep. Nelson Dollar, a Wake Republican who is senior co-chair of the House budget committee. "There are tremendous advantages in North Carolina's system," he told an Associated Press reporter. Dollar says the wiser course is to refine and improve the present system.

It's easy to see how McCrory and some legislators might conclude that the Medicaid system itself is broken. With hundreds of millions of dollars in cost overruns in recent years, the program has been a thorn in budget writers' paws.

Or is it? Might the problem really be that budget writers aren't being realistic and appropriating what the program really needs? We've been through a devastating recession, after all, and tens of thousands of state residents have either lost their jobs or moved into lower-paying, often part-time, work, thus becoming eligible for Medicaid. That's not about mismanagement, although it may well be about shortsighted budget research.

Medicaid serves 1.7 million North Carolina residents and will cost state taxpayers $3.5 billion this year. That only covers a third of the program's expense. The rest is funded by Washington.

Not long ago, managers at the Department of Health and Human Services were talking about getting Medicaid into a new managed-care model by 2015. They've backed away from that target and now are looking at doing more research and getting a revamped plan working by 2020. One adviser working on the project says, "We are committed to not harming the current system." Good plan. Fixing what's working well is a lousy way to run a government.