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The Daily Tar Heel

Easley Seeks More Federal Funds for State Medicaid

North Carolina received a 1 percent cut in federal funding for Medicaid last year, which meant $65 million less for this year.

In the letter, Easley stated that increased federal aid is crucial to protect the state's "most vulnerable citizens." Medicaid provides health care for the poor, elderly and disabled.

"Maintaining and increasing federal participation in the Medicaid program not only helps North Carolina but also our counties that are struggling to meet their own budget needs," Easley stated. The Medicaid shortfall adds to the state's budget woes. The state already faces an estimated $400 million to $900 million budget deficit before the fiscal year ends in June.

Rising program costs, cuts in funding and the recent economic downturn all contributed to the Medicaid budget shortfall.

A 1 percent cut in federal Medicaid funding last year left North Carolina with $65 million less for the current fiscal year than in 2001. The federal government continues to provide about 61 percent of the state Medicaid budget.

North Carolina's annual expenditures of about $2 billion provide another 33 percent of Medicaid funding, and counties pick up the rest.

At the same time, the number of people seeking Medicaid has risen, said Daphne Lyon, deputy director for the Division of Medical Assistance, which oversees the state's Medicaid program.

More than 1 million people in North Carolina receive Medicaid benefits.

Last year, Lyon said, the state cut costs by changing reimbursement amounts and placing limits on the hours of personal care patients can receive per day. More limits could be placed on services in the case of another shortfall, she said.

Lois Nilsen, spokeswoman for the N.C. Department of Health and Human Services, also said the state might need to look at several options when closing the budget gap. "Lots of things are on the table," she said. Lyon said she is hopeful that federal funding will be increased. "(But) we cannot depend on that," she added.

In his letter, Easley cited proposals to return the federal matching rate to the 2001 levels, to increase Medicaid funding for all states and to provide relief to states with high unemployment.

"All of these various provisions would help North Carolina," he stated in the letter.

No relief has yet to come from the federal government, but provisions for Medicaid assistance to the states are being considered under the economic stimulus package currently in Congress.

Michael Briggs, press secretary for Sen. John Edwards, D-N.C., said many states are experiencing similar budget problems. "It's not unique to North Carolina," he said.

Edwards had proposed increases in Medicaid distribution for the states before Easley's letter, Briggs said.

Although Briggs said Edwards sees a chance of the economic stimulus package passing, Briggs said it depends on what kind of priority the president put on it. "It's high on everyone's agenda."

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