The End of Medicaid is Just Beginning

When the Republican led Senate and House passed the Budget Reconciliation Act of 2005, they did so without the support of one Democrat, and with a number of Republican defections. Why? The reason is simple, the budget gives more tax cuts to the ultra-wealthy while at the same time seriously putting in peril the very lives of millions of Americans. The Budget Reconciliation Act should go down in history as the Republican End of Medicaid Act. Hopefully, this destruction of Medicaid will play a major role in the 06 elections, but I’m not sure it will. Once again, the Republicans have been crafty. They have changed the rules on Medicaid in a way that will do serious harm to disabled children, the blind, the elderly, and the less fortunate in our society – but they have done so in a way that will not hurt them until AFTER the midterm election.

To help clarify this situation and what will be happening down the road, we at BlueNC have asked State Rep. Verla Insko to provide us some facts on the new Medicaid cuts and regulations. Rep. Insko has just filed to run for her sixth term in the 56th NC House district, representing most of Chapel Hill, Carrboro, and one Orange County Precinct. Rep. Insko is eminently qualified to answer questions on potential Medicaid cuts, as she Vice-Chairs the Appropriations Committee; Chairs the Appropriations Subcommittee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities and Substance Abuse; is a member of the Health, Environment and Natural Resources Committee; and, serves on the Joint Legislative Oversight Committees on Education and Health, where she Chairs the Access Subcommittee of the House Select Committee on Health Care.

The questions submitted to Rep. Insko are in bold, her answers follow. Breaks between questions are my own takes on the situation and are not in any way associated with Rep. Insko, nor has she had any chance to preview my responses.

With regards to Medicaid, how many North Carolinians use its services? How is that number trending over time?
In SFY 2004, Medicaid covered 1.5 million North Carolinians or 17.7% of the state population.
Here are the growth rates for the last five years:
1999-2000 3.78%
2000-2001 10.92
2001-2002 2.62%
2002-2003 4.12%
2003-2004 4.50%
Growth in Medicaid is directly related to the state of the economy. In some cases it is a leading indicator that the economy is in trouble.

What kinds of people use Medicaid? How many children? How many handicapped children? How many handicapped adults?
Medicaid covers certain categories of poor people. In NC, the financial eligibility categories are complex so I will just mention the groups that are covered if they meet the financial criteria: pregnant women and children under 19, families with dependent children and the aged, blind and disabled. See [below] for more in eligibility.
In SFY 2004, the state served 870,000 children and 241,000 disabled adults and children (children counted in both categories)

The Federal Budget Reconciliation Bill increases the amount of co-pays, deductibles, and premiums that Medicaid patients must pay. How will this affect North Carolinians? {author note: I would like to thank Rep. Insko for correcting me on this, my interpretation was that the payment changes were made by the Federal Government with other changes left to the state}
The Budget Reconciliation bill authorizes states to increase co-payments, deductibles, and premium for Medicaid. These are optional state plan changes that do not require waivers so the changes easier to implement; but, states are not mandated to make changes.

The Federal Bill also eases restrictions on what states must cover, what changes does this allow the state to make?
Medicaid has three service levels: the required package, optional services which states add by simply amending their state plan, and waivers which require a review and approval by CMS. The federal action moves some of the required services to the optional package. North Carolina has one of the best Medicaid programs in the nation because we have voluntarily chosen to add many of the optional services and because our Medicaid rates are relatively high. Problems that we can and should address include our general unhealthy life style and unnecessary diagnostic tests. . If the public outcry is strong enough, we can retain our current services.
The Budget Reconciliation Act allows states to provide medical assistance through benchmark equivalent coverage and through wraparound services. It also allows states to limit the benefit available to certain categories of people. This is fairly complex.
For more details see

Indeed, this is quite complex and confusing, so let’s make it simple by using an example. The federal action moves some of the required services to the optional package. That means that services which states once HAD to offer, they now CAN offer if they choose. If they choose not to, they save money. One area that can be limited by states is the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) service. This is a program aimed at taking care of our most vulnerable population – children. Included among those are our handicapped and disabled children. The things that had previously been mandatory, which are now optional?
Screening Services -- Screening services must include all of the following services: Comprehensive health and developmental history, Comprehensive unclothed physical exam, Appropriate immunizations, Laboratory tests, Lead Toxicity Screening.
Health Education -- Health education is a required component of screening services and includes anticipatory guidance.
Vision Services -- At a minimum, include diagnosis and treatment for defects in vision, including eyeglasses.
Dental Services -- At a minimum, include relief of pain and infections, restoration of teeth and maintenance of dental health;
Hearing Services -- At a minimum, include diagnosis and treatment for defects in hearing, including hearing aids; and
Other Necessary Health Care -- States must provide other necessary health care, diagnosis services, treatment, and other measure described in section 1905(a) of the Act to correct or ameliorate defects, and physical and mental illnesses and conditions discovered by the screening services.
Periodicity Schedule -- Periodicity schedules for Periodic Screening, Vision, and Hearing services must be provided at intervals that meet reasonable standards of medical practice. States must consult with recognized medical organizations involved in child health care in developing reasonable standards
Diagnosis -- When a screening examination indicates the need for further evaluation of an individual's health, provide diagnostic services.
Treatment -- Health care must be made available for treatment or other measures to correct or ameliorate defects and physical and mental illnesses or conditions discovered by the screening services.
For more on POTENTIAL cuts and how they would affect handicapped children, I would point you to a previous post I wrote on this, located here.

Given the fight over Medicaid cuts in North Carolina last year, what changes might Medicaid patients expect to be proposed in North Carolina?
As a result of the recent study on Health Care by NC Institute on Medicine (IOM), I know one bill will be introduced to expand Medicaid and/or the SCHIP program. I have heard from some members of the Medicaid subcommittee that they will recommend making some cuts in Medicaid. I believe that would be unwise and counterproductive as it would only result in North Carolina losing ground in critical areas of health care and increase costs in the long run. No specific cuts have been proposed. Recommendations will not be finalized until closer to the May 10 convening of the General Assembly.

What alternatives will people have should their access to basic services be cut at the state level?
Another IOM recommendation is to increase support for free clinics such as health departments, federally qualified health centers, rural health centers, etc. I support this proposal; but I oppose cutting any of our current Medicaid services and SCHIP because these two public programs do not cover all poor people. Men and women without children between the ages of 19 and 64 have no coverage options other than through their employers. Fully 3/4ths of the people without health insurance are in families below 300% of poverty. Most of these are in families with one or two working adults.

What does this all mean for Medicaid coverage in North Carolina? In the short-term, probably nothing. The states now have the power to slash coverage, jack up prices, and in many cases disable Medicaid. But, when will this occur? I can’t see any political party taking up this mantra in the session leading up to the 06 elections. For good reason, it is a stupid idea to cut Medicaid. Who is on Medicaid? The working poor, handicapped children, and the elderly.

Yet, in the preliminary 2005-06 budget, the Democratically-Controlled, North Carolina Senate voted to cut Medicaid services for the blind, disabled, and the elderly (Word Document). A strong grassroots effort stopped this from happening, but many of those same Senators, might take Medicaid back to the chopping block again this year. For the Democratic Party to even suggest cutting services for these people is reprehensible. What makes it unDemocratic is that the last time the Senate attempted to cut Medicaid they also put in place tax cuts for the wealthiest North Carolinians and for corporations.

In what part of North Carolina do Democratic voters agree with this strategy of cutting taxes on the wealthy and paying for it by slashing services to blind, elderly citizens? If there is one thing we should know as Democrats, it is that the Republican Party has done a wonderful job branding us in each of the last half-dozen elections. Can we really believe there is a voter in North Carolina that doesn’t think Democrats are liberals that want Clinton-era Universal Health Care? Is there really a voter that doesn’t think we stand for Personal Freedom? Is there a voter that doesn’t think we believe in a fair-tax system for all so that our elderly, our blind, and our handicapped children can have the safety net of Medicaid? In spite of all this, or perhaps because of all this, North Carolinians came out and voted Democratic and put the Democratic Party in the Governor’s Mansion, in control of the House, and in control of the Senate. Which leaves this North Carolinian wondering, why are our representatives so afraid to act like Democrats?


Act Now

North Carolinians - contact your Legislator and let them know what you think about Medicaid cuts.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Great Post!

Thank you so much for taking the time to talk to Representative Insko and for sharing her responses here. I don't think any of us can speak intelligently about Medicaid unless we understand what it means and who pulls the strings in our state. This post is one to bookmark.

Excellent work Robert

I think the information from Verla is excellent. It might not point a blazing finger at the inept Bush administration fighting their war against those living in poverty, but it is very constructive and gives North Carolinians just one more reason to elect Democrats to the NC legislature.

Thank you. Thank you. Thank you.

Vote Democratic! The ass you save may be your own.