North Carolina’s Medicaid system is in a deep financial hole, a story that is gaining wide coverage (see recent article in Business Week). The state is over budget on Medicaid by more than $250 million, putting legislators in a serious bind, as the program was budgeted to cut more than $500 million in services this year.
One of the biggest problems facing the $10 billion program, which is both federally and state funded, is the inability of the system to provide for proper oversight and ensure services are going to those most in need. In the first 6 months of the fiscal year the state had already overspent by $188 million, even after substantial cuts to program providers.
The state is under pressure to continue making cuts before the year is up which could leave thousands of patients needing in home care without necessary services. Providers continue losing money on every patient, while the state sinks deeper into the Medicaid hole.
It seems impossible and rather unbelievable that the centerpiece of federal health reform legislation is to continue cutting Medicaid reimbursement to states, while rapidly expanding the system to cover more than 20% of the U.S. population.