Compromising on Economic Development, Medicaid Reform


The Senate has passed compromise bills on economic development and Medicaid reform with bipartisan support, fulfilling two of the biggest goals of the session while adopting a number of provisions supported by members of the North Carolina House and Gov. Pat McCrory.

To encourage progress toward a final budget agreement, we removed these two issues from budget negotiations last week and moved forward with standalone, compromise bills.

The compromise economic development plan passed by the Senate:

• Answers the governor’s call for additional job recruitment dollars and moves to the middle of the original House and Senate proposals, by extending the state Job Development Investment Grants (JDIG) program.
• Creates a new economic development tool for attracting major manufacturing projects, like automobile and aerospace manufacturers.
• Compromises on efforts to reform the state’s unfair system for allocating sales tax dollars by returning to a fair system in place for a quarter of century prior to 2007, where 50 percent of sales tax revenues would be allocated based on where people live, with the remaining 50 percent allocated based on the county where a sale takes place.

We also passed a new compromise plan to reform and restructure the state’s broken Medicaid program. We all remember that a long history of problems at the state Department of Health and Human Services, spanning several administrations, has resulted in major operational and budgetary problems. And just last week, Blue Cross and Blue Shield of North Carolina announced that Obamacare is forcing them to seek supplemental rate increases – the latest reminder of spiraling health care costs driving the need for Medicaid reform.

The compromise Medicaid reform plan passed by the Senate:

• Achieves better budget predictability and sustainability by moving to a “capitated” system where a flat fee is paid to cover all physical, mental and long-term care services for most Medicaid recipients.
• Reduces the risk of cost overruns by allowing this system to be covered by both provider-led health plans (supported by the House and administration) and managed care plans (supported by the Senate).
• Creates a new Department of Medicaid managed by a cabinet secretary appointed by the governor and confirmed by the General Assembly.

By working in good faith with our House and executive branch colleagues, we’ve taken real steps to encourage economic development across the entire state, give Gov.  Pat McCrory tools to recruit and retain jobs and finally help get Medicaid costs under control. We hope the House will join us in the spirit of compromise and support these very important goals.