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North Carolina Lawmakers Continue to Disagree on Medicaid Expansion

July 1, 2019

Plans to expand Medicaid coverage to hundreds of thousands of additional North Carolina residents remain in limbo, with lawmakers arguing over how to pay for the program and whether the expansion should include a work requirement.

Since taking office in January 2017, Gov. Roy Cooper, a Democrat, has made Medicaid expansion a top priority, but enabling legislation has repeatedly stalled in the Republican-controlled House and Senate. Divisions not only between the parties but within them have thwarted passage of any compromise bill that could make it to the governor’s desk.

One bill, cosponsored by Sen. Joyce Krawiec (R-Forsyth), wouldn’t expand Medicaid but would impose a work requirement on able-bodied Medicaid recipients. It would apply the same work requirement guidelines found in the federal Supplemental Nutrition Assistance Program, commonly known as food stamps, for nondisabled adults. The bill would not authorize the state Department of Health and Human Services to make any changes in Medicaid eligibility other than the work and community engagement requirements.

Improving Recipients’ Chances

“Despite the hundreds of billions of dollars that have been pumped into the Medicaid system at both the state and federal level, there are still studies that show that Medicaid does not guarantee better health outcomes,” the bill’s cosponsors said in a joint statement.

“Conversely, there is strong evidence suggesting that productive work and community engagement may improve health outcomes,” the statement said. “By encouraging these folks already on Medicaid to work and engage with their community, not only are we improving their chances of improved health outcomes, we are also improving their chances of someday moving off government assistance programs altogether,” they added.

If North Carolina enacts work requirements, the new law will probably face a legal challenge. In the past few months, federal judges have struck down similar requirements in Kentucky and Arkansas.

Who Pays for Expansion

The Krawiec legislation adopts the work requirements contained in an earlier bill, known as Carolina Cares, introduced in April 2017 by Rep. Donny Lambeth (R-Forsyth). Unlike the Krawiec measure, Carolina Cares, which was reintroduced this year, would expand Medicaid to as many as 450,000 to 670,000 North Carolinians. That expansion provision, and concerns about how to pay for it, caused the bill to stall in a GOP-controlled committee on April 10.

The Lambeth bill, plus two bills supported by Cooper and Democratic legislators, would address the funding problem by requiring health-care systems and hospitals to pay the state’s 10 percent share of the expanded services and administrative costs. The federal government is currently obligated to pick up the remaining 90 percent.

The assessment on hospitals enjoys the support of the North Carolina Medical Society and the North Carolina Healthcare Association but has come under fire from Republican lawmakers, who see it as a tax that will ultimately be passed on to patients.

‘Someone Always Has to Pay’

“Governor Cooper is pushing this idea that Medicaid expansion proposal is revenue-neutral to the state, but that idea is just not based in reality,” Senate Majority Leader Phil Berger (R-Rockingham) told the Winston-Salem Journal(March 28). “There is no such thing as free money; someone always has to pay.”

 Further stirring the legislative pot is a bill introduced on April 8 by Lambeth and a bipartisan group of legislators. In a unique approach to funding the state’s share of Medicaid expansion, the NC Health Care for Working Families bill would drop the controversial assessment on hospitals in favor of participants paying an annual premium, billed monthly, set at 2 percent of the participant’s household income. To encourage compliance, the bill stipulates failure of a participant to make a premium contribution within 90 days of its due date would result in the suspension of the participant from the program unless the individual shows he or she was exempt from the premium requirements prior to the expiration of that 90-day period.

“While supporters of Medicaid expansion like to claim they are taking advantage of ‘free money’ from the federal government, no such thing exists,” said Mathew Glans, a senior policy analyst at the Heartland Institute, which publishes Health Care News. “Expanding Medicaid often ends up costing states millions of extra tax dollars every year and destabilizes the program because, as we’ve seen in state after state, far more people enroll for Medicaid than expansion advocates predict, causing costs to skyrocket.”

Suggests Broader Reforms

Glans says states would do better to apply for Section 1115 waivers from the U.S. Department of Health and Human Services.

“Reform proposals could include cost sharing, incentives for enrollees to engage in healthy behaviors, time limits on coverage, monthly income verification and eligibility renewals, payment and eligibility changes, and the incorporation of health care innovations, including direct primary care,” said Glans.

“Instead of expanding the flawed Medicaid system, which is unnecessarily costly, delivers subpar health care, and shifts more power to the national government, state lawmakers should focus on reform options that would manage costs, ensure accountability, limit fraud, and refocus Medicaid to achieve its original purpose of providing care for those truly in need.”

 

Bonner R. Cohen, Ph.D.,(bcohen@nationalcenter.org)is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).

 

Official Connections:

North Carolina state Senator Joyce Krawiec (R-Forsyth)

https://www.ncleg.gov/Members/Biography/S/384

North Carolina state Rep. Donny Lambeth (R-Forsyth)

https://www.ncleg.gov/Members/Biography/H/646

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org