Gov. Pat McCrory's budget, all 344 pages of it, was released last Wednesday, but health care advocates say the battle for the state's poorest residents was lost three weeks ago.
That's when McCrory approved GOP legislation denying Medicaid expansion in North Carolina, an expansion that—based on the federal Affordable Care Act (ACA), or Obamacare, as it's popularly known—would have deployed $521 million in federal cash to provide health coverage for an additional 500,000 of the state's poorest residents.
According to advocates for the poor such as Kevin Rogers, policy director at Action NC, anything else McCrory proposes for the state's Medicaid reform is hopelessly moot.
"Covering another 500,000 folks seems like a really good idea when it's paid for 100 percent," Rogers says. "It's difficult to be enthusiastic about any Medicaid plan that doesn't include the expansion."
Still, what McCrory delivered instead—an additional $755 million in state money for Medicaid and a Medicaid reserve fund intended to head off future budget shortfalls—surprised some critics.
The money would be allocated in an era in which Medicaid payments frequently outpace the amount budgeted by state leaders. New state Medicaid director Carol Steckel told lawmakers this month that this fiscal year's spending is at least $70 million over budget.
Rogers says health care activists were somewhat relieved McCrory did not pursue a far-right, "slash and burn" agenda with the Medicaid budget. "We're always concerned when cuts get made that Medicaid is such an attractive place to go because it's such a large line item," says Rogers.
Agreed, says Adam Linker, health policy analyst for the N.C. Justice Center, a Raleigh-based nonprofit advocating for the poor. "It could have been worse," Linker says.
It's unclear whether GOP lawmakers in the N.C. General Assembly will go for McCrory's plan. Key GOP budget leaders Rep. Nelson Dollar, R-Wake, and Rep. Justin Burr, R-Stanly, did not respond to INDY Week requests for comment this week.
But Democratic lawmakers and activists, including Rogers, say the decision to reject Medicaid expansion outweighs the "good" in McCrory's plan. The expansion would have eased Medicaid eligibility requirements and would have been entirely bankrolled by the federal government until 2017. The federal share would gradually shrink to 90 percent in 2021 and thereafter.
Sen. Mike Woodard, a Durham Democrat, says the impacts of the GOP move will be felt in North Carolina for years.
"Turning our back on expansion means that we will have more North Carolinians who are not going to be able to get service," Woodard says. "We're not serving the long-term health care needs of our poorest citizens."
Yet state Republicans and McCrory say they will back no such expansion until the state's growing Medicaid spending is under control.
A January report from the nonpartisan N.C. Institute of Medicine pushed expansion too, noting the state would have saved roughly $65 million in Medicaid spending from 2014 to 2021. It would also have created 25,000 jobs by 2016.
McCrory's budget statement doesn't mention Medicaid expansion but calls for increased allocations to account for expected growth in enrollment. The governor also promises "fundamental" reform in the state's Medicaid spending, which totaled roughly $3 billion last year.
"The state simply cannot sustain this rapid growth in spending," McCrory wrote in his budget.
Progressive advocates argue the GOP rationale for blocking expansion is flawed. Left-leaning N.C. Policy Watch says North Carolina's 3.5 percent Medicaid growth is the slowest in the nation.
Some of McCrory's Medicaid message echoes the Institute of Medicine report, which projected that nearly 70,000 state residents—dubbed the "woodwork" Medicaid population—will gain coverage in 2014. According to the report, this group includes state residents who qualify for Medicaid but are not currently enrolled.
The "woodwork" growth would surpass 87,000 by 2021, the report says, necessitating an increase in state spending of roughly $37.4 million by 2014 and growing to approximately $202.8 million by 2021.
N.C. Rep. Verla Insko, a nine-term Democrat from Orange County, calls McCrory's Medicaid allotment and the creation of a Medicaid reserve fund a "step in the right direction," but she worries GOP forecasts of Medicaid expenses are unrealistic. "It's very difficult to make major changes and predict what's going to happen," Insko says.
Other health care advocates are as worried about McCrory's health care budget priorities.
Lisa Hazirjian, executive director of the N.C. AIDS Action Network, says her group, which advocates for the estimated 35,000 North Carolina residents with HIV/AIDS, is worried by a McCrory budget proposal to slash $8 million in funding for the AIDS Drug Assistance Program (ADAP), which assists some 6,500 HIV/AIDS patients with paying for expensive medication.
With federal sequestration cuts coming for the program, state dollars take on a greater importance, Hazirjian says.
"What we'd love to see from the governor and the Legislature is some sensible investment in cost-effective programs like Medicaid and ADAP that will lead to a healthier North Carolina," she says. "And, frankly, one that's running more efficiently."
Disability Rights North Carolina Policy Director Corye Dunn—whose organization represents individuals with disabilities, many of whom benefit from Medicaid payments—says she is awaiting more details on McCrory's push for reform before weighing in on his budget.
"We want to know how he's planning to spend the Medicaid money," Dunn says.
Critics say McCrory has something to prove. As Linker points out, McCrory's moves separate him from GOP counterparts such as Arizona Gov. Jan Brewer and Florida Gov. Rick Scott, both conservatives who ultimately accepted Medicaid expansion.
"It's just an extremist point of view," says Linker. "It puts you to the right of Jan Brewer. It puts you to the right of Rick Scott. That's not a moderate place to be."
This article appeared in print with the headline "A Band-Aid approach."