Is North Dakota in a Position to Pick Up More of the Medicaid Tab?

Is North Dakota in a position to take on more of Medicaid’s funding? That is an important question to consider while Congress debates health care reform. Under the rushed plan passed by the House of Representatives, Medicaid would be shifted to a new funding formula. Reports suggest the new formula would limit federal expenditures and place a bigger burden onto the states. The official Congressional Budget Office (CBO) score is expected to be released on May 24th.

Often people simply equate Medicaid to poor people. Partly true, but Medicaid also funds many services for children, women, working individuals, and helps keep rural hospitals afloat. It is so much more than just low income individuals that benefit. These vital services are funded jointly by the federal government and states. Currently, the funding for traditional Medicaid comes from an equation known as Federal Medical Assistance Percentages (FMAP). Over the past couple of years, when North Dakota’s budget grew, our state and federal share became approximately 50-50. The state picked up more while our federal reimbursement diminished because we could afford it. Under current federal law, states cannot receive less than a 50% federal match.

Medicaid Expansion, part of Obamacare, expanded eligibility in states who voted to allow it and is primarily funded by the federal government. That funding will be phased down to 90% federal funding by the year 2020. States will then pick up the other 10%. In 2013, North Dakota expanded Medicaid to a lot of people’s surprise. It was renewed this year, and approximately 20,000 North Dakotans have benefited from its passage.

Though the Medicaid funding formulas are different, one thing is common; both rely heavily on constant federal funding. Under the current GOP plan in Congress, that federal funding would be capped putting more pressure on state budgets to either increase their expenditures or cut services to individuals and hospitals that so desperately rely on it. Which begs the question if North Dakota is in an ideal position for this? My answer: absolutely not.

We saw the dramatic downturn in our state’s budget over the last two years because of volatile commodities and poor fiscal management by the Republican-led Legislature. To make the budget balance this session, they cut services and dug deep into budgetary reserves. The method does not look to be sustainable over the long run and for future budgets. The decrease in federal funding doesn’t mean the cost of providing these services will go down. In fact, costs will likely continue to rise. Is the legislature prepared to fill that gap with increase general fund dollars? I’m not confident they are. Governor Burgum and legislators themselves should not be eager for these federal changes.

And where in the hell are the local associations when it comes to speaking publicly on this federal healthcare bill? A couple of weeks ago, the Fargo Forum ran a story saying local organizations remain quiet or did not return requests for comment on the GOP health care replacement plan. (Ironically, when I reached out to the Forum reporter for comment, he didn’t return my request either.) Where does the North Dakota Hospital Association (NDHA) stand on the potential changes to Medicaid? The rural hospitals they represent have a lot at stake in this debate. Not only do they rely on these organizations to speak up, but they can serve the greater public by informing them of the potential impacts.

Others like to point out their silence is because the reform has a long ways to go before becoming law. They’re correct. But, I wish those same individuals would tell that to Congressman Cramer who grabbed a six pack after voting for these changes and went to celebrate at the White House. If people aren’t informed on the impacts and what they might mean for family, their place of work, or their rural hospital, the Senate might not make the changes necessary. These groups speak up all the time while legislation is being crafted, what is different this time? It is too important to remain silent for political reasons.

If Congress is successful in passing health care reform with the current changes to Medicaid in the next two years, the North Dakota Legislature was only successful in holding onto three legislative days. They failed to maintain ten as they had hoped for. Three days on something so large means a rushed public debate. If North Dakota needs to pay more to maintain access to vital care delivered through Medicaid, does the Legislature have the will to do so? We better begin this debate sooner rather than later.