DHHS cautions of state Medicaid funding shortfall for 2021-22; COVID-19 expenses biggest impact

[MM Curator Summary]: NC officials are warning about new monies needed to fund Medicaid spending increases, which are driven by enrollment surges and actions in response to the pandemic.


The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


Another expected, but telling, ripple effect from the COVID-19 pandemic is that North Carolina’s Medicaid program is headed to a budget shortfall for 2021-22.

Kody Kinsley, the state’s health secretary, offered that projection last week to the joint legislative oversight Health and Human Services committee.

If that occurs, it would be the first non-surplus in eight fiscal years.

Medicaid currently covers 2.7 million North Carolinians with a $20.14 billion budget for 2021-22.

That represents about a 480,000 enrollment increase since the beginning of the pandemic in March 2020.

Enrollment also is up 32% from 1.84 million at the start of the 2013-14 fiscal year.

There have been Democratic-led efforts since 2014 to expand Medicaid coverage to another 450,000 and 650,000 through the federal Affordable Care Act, also known as Obamacare.

Healthinsurance.org estimates about 621,000 North Carolinians would benefit from expansion, with 212,000 of those individuals being listed as having no other realistic option for health coverage.

The nonprofit group also estimates that North Carolina is losing out on $5.9 billion in federal Medicaid funds that could gained through expansion.

Reasons for shortfall

Kinsley cited several factors for the potential shortfall, including: actual enrollment over the past nine months exceeding projections; temporary rate increases in response to the pandemic “continuing longer than planned;” additional expenses to resolve staffing shortages in skilled nursing facilities; and changes in state hospital assessment fees.

Through January, the state Medicaid program has spent 59% of its 2021-22 budget, or $11.95 billion out of $20.14 billion.

At the same time period in 2020-21, the program had spent 51%, or $9.18 billion of $18.2 billion.

Kinsley said the N.C. Department of Health and Human Services “is actively pursuing FEMA reimbursements for eligible COVID-related costs to maximize and extend support for services across North Carolina.”

For the 2009-10 through 2013-14 fiscal years, the state Medicaid program had nearly a $2.4 billion financing gap that had to be filled through additional legislative funding.

At that time, the state Medicaid program had a $14 billion budget.

The budget overrun and additional funding requirement was a key issue during the 2012 governor’s race won by Republican Pat McCrory.

The McCrory administration credited improved budgeting forecasts and more conservative spending for beginning what became eight years of Medicaid funding surpluses that has continued through the first five years of the Cooper administration.

Although Kinsley said he couldn’t project when a budget surplus would resume, he told legislators it is likely to resume in a post-pandemic period.

Kinsley said the Medicaid program’s budget priorities for 2022-23 will include:

n Expanding access to treatment and services for those most at need, including those involved in the justice system and child welfare system.

n Assisting individuals gain access “to the right level of high-quality services for their needs, including care in their community;”

n Combating the increase in behavioral health crises, including overdoses and youth suicides, with expanded crisis supports and investing in prevention and resilience initiatives;

n Increasing access to child and family well-being services;

n Sustainable pay for early childhood care workers; and

n Building “a more robust” local public-health infrastructure that “can be prepared for the next crisis.


Clipped from: https://journalnow.com/news/state-and-regional/govt-and-politics/dhhs-cautions-of-state-medicaid-funding-shortfall-for-2021-22-covid-19-expenses-biggest-impact/article_3e6f0b1e-a6da-11ec-88b3-db7bd094fbd6.html