Folwell warns of rising healthcare costs under Medicaid Expansion

North Carolina Treasurer Dale Folwell, March 7, 2023. Livestream.

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  • “It could ultimately have an impact on not only its operating budgets from a year-to-year basis but also have an impact on our gigantic unfunded healthcare liability,” Folwell said.

During his monthly “Ask Me Anything” conference call with reporters earlier this week, North Carolina State Treasurer Dale Folwell said he is concerned healthcare costs increasing under Medicaid expansion, how he is protecting the state pension plan from ESG investments, and why a Senate bill targeting municipalities with late audits is good for their residents.

Disappointed that Medicaid expansion didn’t do more to actually lower the cost of healthcare making it more accessible to those who need it, Folwell said he is very concerned about a recent report that states Medicaid expansion will increase the cost of healthcare, including the State Health Plan (SHP). 

“It could ultimately have an impact on not only its operating budgets from a year-to-year basis but also have an impact on our gigantic unfunded healthcare liability,” Folwell said. 

He also goes into how not enough was done in the legislature regarding Certificate of Need (CON) reform:

State Treasurer Dale Folwell

But it may be a while before Medicaid expansion occurs as it is contingent on the state budget becoming law. Votes are not expected on the budget until sometime in August. Democrats, like NC House Democratic Leader Robert Reives, are calling for Medicaid to be voted on separately before the votes on the budget take place. 

Source: Rep. Robert Reives, D-Chatham, Twitter page.

ESG Investing

Folwell said he has also taken steps to protect the state pension plan from Environmental, Social, and Corporate Governance or ESG investments. 

He said his office has had a long-term relationship with BlackRock, and in December, they were able to secure the lowering of fees. 

“In terms of the investment management division, you’re trying to get the highest return for the lowest cost with the biggest margin of safety,” he said.

The treasurer’s office also pulled out all of the pension plan’s proxies from Larry Fink and BlackRock so they could no longer “politicize the state’s assets” and assumed control of them.

He also called for the removal of Fink from his position. 

“The reason that I did that is that we own BlackRock management company inside of our index,” Folwell said. “You don’t get to choose which stocks are in those indexes. So, we own BlackRock stock, and that stock has fallen dramatically over a period of time because they’re losing assets.”

The treasurer’s office is also looking at issues regarding ESG & ESG policies to ensure they are not indirectly involved in some other type of ESG model.

Folwell said that H.B.750, which has become law with an override of Democrat Gov. Cooper’s veto, protects retirees’ money from being used for Wall Street’s “wacktivist” agenda. 

A few reporters on the call questioned the need for the law, stating that it could be taken care of by the treasurer’s office or put before the voters in an election.

Folwell replied that they didn’t have ESG policies and were grateful that legislators who studied the issue partnered with his office and worked on it.

“It’s not just the law that passed but how you actually operationalize it,” he said, pointing out that ESG investments will prove to be poor performers that charge higher fees.

North Carolina joins a growing number of states that have enacted laws or adopted regulations to restrict the use of ESG criteria in state investments.

Late local government audits

He said that S.B. 299, Reimburse Late Audit Costs with Sales Tax Revenue, also a bill that became law despite an override from Cooper, gives municipalities an incentive not to be late on audits. 

He mentioned that the cases of Spring Lake, in which the former town finance director embezzled over $500,000, and East Laurinburg, which saw its charter dissolved for financial mismanagement, would not have occurred had this law been in place.

“Our hope is that this law would never ever need to be used because that would mean the counties, the water and sewer districts, or the cities that are taking all this taxpayer money and which is now on steroids because of the federal money that’s coming into these communities, that we would never have to use it because that would mean the local elected officials were doing their job to make sure the books were balanced, the books were reconciled, and an outside firm had looked at that and said thumbs up everything’s in line,” Folwell said.

When asked if the law would actually hurt residents of small municipalities that don’t have the money or financial expertise to perform an audit since some of the municipalities’ sales tax revenue would be used to complete an audit, Folwell said he completely disagreed because he said a lot of the local governments are borrowing money for things when they don’t have the ability to pay it back.

“The intent is to advocate for these individuals on their behalf to make sure that the hard-earned, especially fixed income money that’s going into the coffers of these cities and counties are properly balanced, properly reconciled, and properly audited,” he countered.