Despite Call for Across-the-Board Spending Cut, North Carolina Medicaid Funds Not in Danger, Officials Say

Although North Carolina Gov. Mike Easley (D) has asked the state Department of Health and Human Services to cut $40 million from its budget, the cuts will not affect Medicaid funds, the AP/RaleighNews & Observer reports. Three weeks ago, the department avoided "big hits" when the state budget was approved (Robertson, AP/Raleigh News & Observer, 10/11). The budget approved in September included higher-than-expected levels of Medicaid and mental health spending, such as increased payments to hospitals and pharmacists (Kaiser Daily Health Policy Report, 9/24). Earlier this week, Easley said that "largely" because of a "drop-off in business" caused by the Sept. 11 attacks on the World Trade Center and the Pentagon, the state's first-quarter revenue collections were $155 million lower than expected, necessitating a 4% across-the-board budget cut. Despite that, Medicaid funding is not in danger, "because more people are likely to need it in bad economic times," health and human services department Deputy Director Lanier Cansler said. Cansler added, "Medicaid is basically off the table. Given the economy, it's going to be a growing figure rather than something (the governor) wants to cut" (AP/Raleigh News & Observer, 10/11).