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NC Child’s Recommendations for the Health and Human Services Budget

At this stage in the state budget process, the House and Senate are negotiating to resolve the differences between their two versions of the budget. Each chamber appoints conferees who meet in closed-door sessions until they can agree—a process that is expected to take at least until the middle of August. In this report we outline the budget differences as they relate to children’s health, and we encourage advocates to communicate with their legislators about these priorities. (You have probably heard about the Medicaid reform initiatives in each chamber: we will talk about those in a separate report.)

These are the messages we believe are important to this policy conversation:

  • The health of all children affects our whole state—if babies are born premature, or with chronic health conditions, it affects the well-being of our communities, the resilience of our health care system, and the ability of families to work and succeed.  Health programs focusing on pregnant women and infants work!
  • Making sure all children get a healthy start is a fundamental job of our government system—making sure our health care system is properly funded is critical.  Doctors need to be fairly reimbursed, mental health care needs to be appropriately funded, and racial disparities in health status need to be addressed at the highest level.  How a state ranks in measures of child health is an important part of economic competitiveness. (Look for the upcoming Kids Count Data Book with NC statistics, in a few weeks.)
  • Healthy children mean a better future for North Carolina—because they will learn better, they will grow up to be more productive citizens, and their families will be stronger.

NC Child offers the following recommendations for budget conferees:

Infant Mortality Prevention:We applaud the increased investments in infant mortality reduction, as well as the emphasis on evidence-based programs and services. We are concerned, however, that support for the ECU High-Risk Maternity Clinic, which serves the eastern region of the state, appears in the Senate budget, but not in the House.

Recommendation: Include support for the ECU High Risk Maternity clinic. Additionally, in evaluating the effectiveness of infant mortality prevention programs, we urge you to utilize shorter-term performance measures, like breast feeding and inter-conception health coverage, and to allow adequate time for data collection and evaluation.

Reimbursement Rates for Primary Care Providers: The Senate budget includes a 22% increase in reimbursement rates for Medicaid primary care providers, which is an important step to ensure that primary care physicians continue to see Medicaid recipients. This increase is not included in the House budget.

Recommendation: Conferees should include the Senate’s proposed increase in reimbursement rates in the final budget agreement.

Community Care of North Carolina (CCNC): Though this is part of the broader Medicaid reform plan, we believe it is ill-advised to eliminate the state contract with CCNC. CCNC has improved health outcomes for children by enhancing the quality of pediatric care and providing medical homes for pregnant women. CCNC is not eliminated in the House budget.

Recommendation: Conferees should not eliminate CCNC in the final budget agreement.

Funding for Mental Health Treatment: The Senate budget cuts $185M in funding for the agencies (LME/MCOs) that provide mental health services. This funding cut is not included in the House budget.

Recommendation: Conferees should exclude the Senate’s proposed cut to LME/MCOs in the final budget.

Wright School: The budget also eliminates the Wright School, which provides intensive inpatient services for the highest-need children in the state. The elimination of the Wright School is not in the House budget.

Recommendation: Conferees should not include the Wright School elimination in the state budget.

Office of Minority Health: The Senate budget eliminates the Office of Minority Health and transfers funding to a competitive block grant program aimed at eliminating racial disparities. This is not included in the House budget.

Recommendation: While the funding remains dedicated to a similar purpose, we believe it is important to maintain an institutional, statewide focus on racial health disparities. Thus, we oppose the elimination of the Office of Minority Health.

Child Care Subsidies: The House budget includes three provisions that would restore access to child care subsidies for low-income families:

  • Raises income eligibility for children in grades K-3 from 133% to 200% of the Federal Poverty Line (FPL). This change would mean that all children 0-8 would be eligible at 200% FPL. Children ages 8-12 would be eligible at 133% FPL.
  • Restores a previous definition of Family Income Unit, so that the income of relative caretakers, like grandparents, doesn’t count against their eligibility for child care subsidies.
  • Reestablishes a prorated parent fee for part-time child care.

The Senate budget proposal includes only the redefinition of the Family Income Unit.

Recommendation: Conferees should adopt the House special provisions on child care eligibility and copayments.

Market Rate Increase for Child Care Subsidies: The Senate budget includes a market rate increase for infant and young toddler child care providers in some rural counties who participate in the child care subsidy program. This means that providers get more money per child, which should help to address the current shortage of high-quality care for infants. This provision is not in the House budget.

Recommendation: Conferees should adopt the Senate’s proposal on the market rate increase for child care subsidies.

NC Pre-K Funding: The Senate budget would result in the loss of 520 NC Pre-K slots as the budget allocates only $2.3M to replace $5M of nonrecurring funding that expires at the end of the current year. The House budget includes $2.3M in state funding and an additional $2.7M of lottery funding to replace expiring funds.

Recommendation: Conferees should fund NC Pre-K at the level included in the House budget to avoid the loss of available slots for at-risk four-year-olds.

Smart Start, NC Pre-K, and Child Care Subsidy Merger: The Senate budget directs the Program Evaluation Division to contract with a third party to develop a plan for merging Smart Start, NC Pre-K, and Child Care Subsidies. The plan is required to be complete by March 1, 2016.

The House budget directs the Joint Legislative Oversight Committee on Health and Human Services to appoint a subcommittee to study the effectiveness and efficiency of early childhood programs.

Recommendation: We believe that a conversation about whether or not this merger is necessary should precede any specific plan to merge the three programs, which is why we support the recommendation in the House budget to study North Carolina’s early childhood programs.

Child Welfare Case Management System: Currently, the state of North Carolina is unable to track children in the child welfare system across county lines, which leads to obvious safety concerns. The Senate budget includes funding for a new case management system ($5.8M in FY16 and $13M in FY17) that is specifically not NCFAST, which has been plagued by problems since its original implementation. This funding is not included in the House budget.

Recommendation: We believe an effective case management system is crucial for the safety of North Carolina’s children and support the Senate’s proposed allocation to invest in a new case management system.

Foster Care through Age 21: The Senate budget would increase the age of foster care to 21, which provides critical support for children in foster care as they move towards independence. This funding is not included in the House budget, but the House has passed legislation extending the age of foster care to 19.

Recommendation: Raising the age of foster care to 21 is a positive step towards improving outcomes for children. Conferees should include this proposal in their final budget.



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