Decimal error leaves lawmakers scrambling over N.C. Health Choice

By: - July 29, 2005 6:11 am

Wilmington StarNews Online

An inadvertently shifted decimal point has forced state health officials and lawmakers to scramble to keep children covered under a health insurance program for families who don’t qualify for Medicaid.

The N.C. Health Choice program covers 140,000 children, with 75 percent of the cost paid for by the federal government and the state picking up the rest.

Both the House and Senate budget included $14.7 million for the 2005-06 fiscal year and $35.5 million for 2006-07 to cover increased enrollment.

But a calculating error by state health officials uncovered in the past week means federal dollars will run out sooner than anticipated.

Allen Dobson, assistant secretary for health policy for the state Department of Health and Human Services, said Thursday the growth rate of expenses per recipient was set at 1.4 percent. But it was actually 14 percent.

Uncovering the mistake reveals that the state’s allocation won’t cover projected enrollment increases and could even force up to 30,000 enrolled children to lose their insurance, Dobson said.

"It makes a pretty big impact," he said.

Legislators this week are looking at several options to cut costs, from reworking reimbursement formulas for health care providers who have Health Choice patients to adjusting eligibility standards.

Sen. Kay Hagan, D-Guilford, co-chairwoman of the Senate Appropriations Committee, said lawmakers are trying to come up with a solution in the final budget that won’t include spending money beyond what is in the House and Senate spending plans.

"We are not going to drop children off of Health Choice," she said.

HHS officials and Gov. Mike Easley asked lawmakers to shift enrolled children ages 5 and under to Medicaid, the government health insurance program for the poor. They also want health care provider reimbursement rates reduced and case managers to help control costs.

Before the error was found, legislators had planned to wait for another two years to rework the Health Choice program.

Without changes, Dobson said the General Assembly would have had to look for tens of millions of dollars over the next two years to cover all the children expected to enroll.

"If there is a silver lining, it’s that it gives us a shot now at getting this program on solid footing going forward," Dobson said.

Rep. Edd Nye, D-Bladen, a co-chair of the House Appropriations Committee, said lowering provider rates for all children to the level offered by Medicaid is also being discussed.

Health Choice is available to children whose parents’ income is no more than twice the federal poverty level. Shifting children less than 5 to Medicaid is problematic because enrollment in Medicaid can’t be limited, Nye said.

The state still would receive 75 percent of the cost to cover these children from the federal government if they were shifted to Medicaid, said Adam Searing with the North Carolina Justice Center’s Health Access Coalition.

Sending children to Medicaid "is simpler. They will get better care," Searing said.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Chris Fitzsimon

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina. [email protected] 919-861-2066