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Press Release

    Medicaid and the State Budget

    07/10/2002

    I don’t know about you, but when Legislators start thinking that they know more about health care issues than doctors, I get nervous. By the way, remember that the definition of health care to politicians is “someone else paying for it.”

    North Carolina cannot solve our Medicaid crisis and close the budget shortfall by limiting the price and availability of prescription drugs. According to a study by the Heritage Foundation, $1.00 spent on pharmaceuticals saves $4.00 on other health care costs. Therefore, reducing access to prescription drugs will cost 4 times the amount of savings. Not real hard to figure out, is it?

    So why is it that politicians in Raleigh continue to think they can squeeze savings from places that make no sense? If prices are set too low for drug companies to make a profit, they will limit the availability of those drugs.

    It’s not real rocket science. When prices are set at one level for Medicaid recipients, someone else must pick up the additional cost. Remember that nothing is free. The cost is just referred to another source. When the people in the private sector, paying the increased cost, can’t pay the expanding prices, Eureka!!! Medicaid rolls will then grow even bigger.

    Currently there is an extortion system going on------with some politicians in Raleigh being the extortionists as usual. It goes like this: N.C. Medicaid restricts the drugs that doctors can prescribe to patients. N.C. then informs drug companies that in order to get medications on this list, they must pay the state 10% of the price of each prescription issued.

    In addition, under current law, drug companies must provide the state’s Medicaid program with all of its drugs at the lowest available price, or a 15.1% discount, whichever is least expensive. Who do you think pays for this? You guessed it. We do. It’s just another way for politicians to get their hands in our pockets and have someone else be the tax collector.

    In Raleigh, they call this a “Supplemental Rebate”. In the real world, it’s called extortion, shakedown, etc. A CEO or businessman caught perpetuating such a scheme would do jail time instead of continuing to be elected.

    Medicaid costs in N.C. have increased by 85% in the past decade. Eventually it will collapse from its own weight. This growth, obviously, cannot be maintained.

    We must reevaluate Medicaid eligibility to ensure that those most deserving are able to receive much-needed health care. Medicaid was intended to be a safety net; not an entitlement for everyone who lacks employer sponsored insurance. Beneficiaries often make careless decisions because they aren’t paying for it.

    True reform must take place to protect the Medicaid system. This can best be accomplished through tax credits, vouchers and state sponsored Medical Savings Accounts. It’s time for legislators to stop this merry-go-round. It’s making me dizzy.

    Joyce Krawiec
    Political Activist
    Kernersville, N.C.