‘Medicaid is the elephant in the room’

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Legislator says expansion of program fiscally irresponsible

Rob Steinburg

Rob Steinburg

CHOWAN COUNTY Editor’s note: The following begins a multipart series, pertaining to an interview with state House Rep. Bob Steinburg, a Republican from Chowan County. The two-hour interview was recently conducted at Steinburg’s home in Edenton. The first segment deals with the expansion of Medicaid.

When Rep. Steinburg entered the legislature in 2012, he — like all newly elected legislators — felt that the Medicaid question was such a complex issue that it would take a vertical learning curve in order to ingest the various facts and details, which would lead to a meaningful solution.

Medicaid has always been treated like a patchwork / catch-as-catch can plan, instead of a long-term vision on how to proceed and achieve positive results.

In this context, Rep Steinburg related one of the great pitfalls that the legislators encountered as they sought to balance the competing concerns between the various programs under consideration at the time.

In 2012, our state legislators thought they would be able to provide a pay raise of 2 percent to teachers and state employees who had worked for five years without any increase in pay, except for a minor upward adjustment in 2011.

The legislators were feeling pretty good in May 2013. Gov. McCrory had just been elected and the legislators were working on a budget for the next two years that was expected to have a $500 million surplus upon which to provide this raise. Everyone had great expectations that they were finally going to be able to achieve this goal!

The legislators had worked hard to create the reserves that would be necessary. In the preceding years, there had been no rainy day fund in addition to the merit pay issue being considered. Then, suddenly, it was reported that the state finances had gone from a $500 million surplus to a $480 million deficit due to cost overruns in the Medicaid program. The legislators had no choice but to rescind the proposed pay increases. Everyone felt terrible, especially the employees and teachers, something that Rep. Steinburg never forgot.

Medicaid overruns had been an ongoing problem for six to eight years prior to the 2012 elections, which gave Republicans control of state government. They all knew that overruns were to be expected due to the history of the program through numerous budget cycles.

As Rep. Steinburg said, “Medicaid is the elephant in the room.”

Now, new pressures to expand the Medicaid program have been discussed. The program is leaking and the legislature is trying to find out where the problems are and how to plug the holes.

This year, reserves have been set aside specifically for Medicaid cost overruns, estimated at $120 million. The expected shortfall is projected to be less than $100 million, which puts our state in a better position than ever before and moving in the right direction.

There has been criticism of the legislature because other states have accepted the expansion of the Medicaid program with funds from the federal government. The federal government has stated its plan to cover the Medicaid program 100 percent until 2016, then pay approximately 90 percent after that, leaving the remaining 10 percent to be paid by the states.

As Rep. Steinburg stated, there is no free money. The Federal Government has no money that it first does not take from taxpaying citizens, or borrow from other nations that adds to the National debt — which currently stands at $18 trillion and counting. Many people have claimed that other states have expanded their Medicaid programs, so why should North Carolina not do the same thing?

In response, Rep. Steinburg relates the old comparison that your parents gave you under the similar circumstances: If the parents of a friend decide to let their child jump off the bridge, should your parents allow you to do the same thing?

Rep. Steinburg believes his job is to be fiscally responsible. Many people have stated that Medicaid represents economic development, which is badly needed in this area as well as being a job creator. But, if the economic cost is greater than what our state can afford, it would be fiscally irresponsible for Steinburg to support this program — without raising taxes — and that will not happen!

The highest duty of his job, as he sees it, is to be a good fiduciary/ guardian of the taxpayer’s money, which is a responsibility that he takes very seriously.

Reporters Comment: Recent media reports suggest that Gov. McCrory is reconsidering the expansion of the Medicaid program. He will need to convince the legislators that the state is in the position to afford this expenditure.