Gov. McCrory released his first budget today which covers FY 2013-2014 and 2014-15. One of the major expenditures in the budget is an effort to ensure a sustainable future for Medicaid in North Carolina. The budget would end accounting tricks that previous administrations have played to hide the true cost of Medicaid and increases funding to the Division of Medical Assistance for Medicaid by $575 million. The budget also establishes a Medicaid Risk Reserve with the amount of $180 million in order to help defray any future cost over runs.
These additions will increase the State Medicaid budget by over $755 million on top of the already $3 billion the State spends on Medicaid. While the proposals will not fix the myriad of problems identified with the State Medicaid system, they will provide an accurate accounting of what the Medicaid system is costing us now. The increasing growth in the cost of Medicare in North Carolina is clearly unsustainable and was a major factor behind Gov. McCrory’s decision to not expand the system as allowed by Obamacare. The budget also notes the Governor will “propose separate legislation for fundamental Medicaid reform.”