This morning the NC Joint Legislative Healthcare Oversight Committee met to discuss the progress of health care initiatives in the state as well as future funding for new and existing programs. Another topic briefly discussed was the projected effect of national healthcare reform on North Carolina.
Dr. William Roper, the Dean of the UNC School of Medicine, addressed the legislature on some of the most pressing challenges in the state’s public hospital system. Among these the $300 million gap facing North Carolina hospitals as a result of uncompensated medical care – less than 12% arising from treating uninsured patients.
Of high concern was the Federal Government’s willingness to expand Medicaid by lowering the eligibility requirements to bring more people into the system. The current Medicaid reimbursement rate to hospitals does not cover the total cost of care and forces hospitals to raise its rates to private insurance.
In simple terms, increased payments from private insurance, not government subsidies, are covering the $300 million gap. Inevitably when private insurance is getting charged higher rates by hospitals, consumers pay higher premiums. The only thing that will be accomplished by the government expanding Medicaid is the continued rise of unfunded medical care liability in public hospitals and the eventual rationing of care.
Dr. Roper provided an interesting perspective. Covering the number of uninsured in the state at Medicare rates would reduce the unfunded cost of care slightly, but losing the financial support of private insurance would make the system exponentially worse off.