N.C. Senate’s 2010-11 Budget Recommendations: Health and Human Services

The 2010 Senate Budget
Introduction
General Government
Public Education
UNC System
Community Colleges
Justice and Public Safety
Health and Human Services
Transportation
Natural and Economic Resources

The Senate’s 2010-11 budget recommendations appear to reduce Health and Human Services (HHS) appropriations by more than $400 million; dropping spending to $3.9 billion from the $4.3 billion outlined in last year’s biennial budget bill.

These numbers, however, do not reflect actual spending on HHS programs because there is $561 million itemized as cuts in the budget plan that are not really cuts at all. Instead, the $561 million is funding that will be shifted from the state to federal funds, courtesy of the federal stimulus act. Most of that money is directed toward the state’s Medicaid program.

Also not to be overlooked is another $506 million in federal stimulus spending already embedded as “cuts” via the two-year spending plan approved in 2009. All told, HHS spending under the Senate’s proposal would come to just under $5 billion. By comparison, actual HHS spending in 2008-09 amounted to $4.5 billion, meaning the Senate’s budget plan would boost HHS spending by 11% in two years.

Among the significant recommendations, the Senate’s plan is very similar to Gov. Perdue’s budget proposal.

Major expansions and reductions include:

Expansions:

• $23 million in one-time expansion for community service funds administered through Local Management Entities. This is the same amount recommended by Perdue.
• $14.2 million extra slotted for the Aids Drug Assistance Program. The expansion is designed to increase the income threshold for eligibility to the program.
• $6.5 million to expand enrollment in NC Health Choice, which is a government-subsidized health insurance program created for children from families who earn too much to qualify for Medicaid.
• $430 million extra appropriated for “Medicaid Rebase” adjustments. Additional funds are needed to finance 5.6 percent growth in Medicaid eligibles, a growth rate not anticipated last year. This expansion is identical to the Governor’s budget plan.

Reductions:

• $482 million listed as a reduction to Medicaid, but in reality is merely a temporary shift of this funding to the federal government via the American Recovery and Reinvestment Act (ARRA).
• $79.4 million in additional ARRA spending to “cover a portion of prescription drug costs paid by Medicare Part D for dually eligible Medicaid/Medicare individuals.
• $45 million in savings projected from management improvement efforts by Community Care Network of North Carolina (CCNC), which is the organization tasked with administering much of the state’s Medicaid program.
• $10 million reduction in the Smart Start program, which amounts to 5.2% of its total budget.
• $59.8 million from eliminating some in-home Personal Care Services for adults and focusing on those adults “with the most intense needs.” Personal Care Services provides aides in everyday needs for adults such as bathing, dressing and eating. This mirror’s Gov. Perdue’s recommendation.
• $36 million generated from Medicaid savings through new “Program Integrity” initiatives. Such initiatives include: “Medicaid SWAT teams for on-site investigations, strengthening Medicaid fraud laws, innovative technology to detect fraud and abuse, and prepayment reviews for questionable providers.”