By Rose Hoban
North Carolina’s economy and business climate is improving, but the state needs to get health care costs under control in order to remain economically competitive.
That was the message given to about a thousand banking and business leaders Monday from both Gov. Pat McCrory and Blue Cross and Blue Shield of North Carolina head Brad Wilson at the annual economic forecast forum sponsored by the North Carolina Bankers Association and the N. C. Chamber of Commerce, held in Research Triangle Park.
at the N.C. Bankers Association economic outlook forum Monday
McCrory listed health care as one of his many legislative priorities for the coming year, along with energy exploration, transportation and providing job opportunities for veterans.
However, Wilson, one of two keynote speakers, made a pointed call for the expansion of Medicaid, the federally and state–funded program that covers health care for close to 1.8 million low-income children and some of their parents, people with disabilities and low-income seniors.
“People of good will can disagree over this and other subjects relevant to health care, but I believe that expanding Medicaid is the right thing to do,” Wilson told the gathering.
The Kaiser Family Foundation has estimated that anywhere from 357,000 to 500,000 state residents would qualify for Medicaid under an expanded program.
Wilson cited a study commissioned by the Robert Wood Johnson Foundation that calculated North Carolina would gain $1.1 billion annually in federal expenditures if the state expanded Medicaid as allowed for under the Affordable Care Act, President Barack Obama’s signature health plan.
“That’s $1.1 billion that you, and us, paid to the United States Treasury in taxes that did not come back to North Carolina in the form of Medicaid payments that then translate to payments to our doctors and to our hospitals for providing care to these North Carolinians,” Wilson said.
McCrory ‘will not close the door’
During his speech, McCrory called health care a significant cost for businesses. He also talked about budget problems experienced by Medicaid over the past decade.
“When I came into office, I did not know this, but the Medicaid program was $550 million misforecast. That’s adult money,” McCrory said. “Today, thanks to restructuring and better forecasting under the leadership and the determination of Sec. Aldona Wos … the Medicaid forecast for this year was under budget.”
Last fall, Wos, head of the state Department of Health and Human Services, reported to the Joint Legislative Oversight Committee on Health and Human Services that her department had a $63 million budget surplus during the past fiscal year.
McCrory said he hoped that Congress and Obama would be open to allowing the state to create its own Medicaid expansion plan.
During a meeting with reporters after his address, McCrory complained of the “current lack of waivers” from federal health care officials to states to develop their own expansion plans. He said federal intransigence makes expanding the program in North Carolina “unattainable.”
“Right now, the only plan [they] have is the Washington plan,” McCrory said. “But I don’t want a Washington plan; I want a North Carolina plan.”
However, of the 28 states that have expanded Medicaid, at least six have been given federal clearance to experiment in how they structure the expansion. Those waivers range from Arkansas’ plan to use Medicaid funds as premium assistance for low-income people to purchase plans on the online health insurance exchange, to Michigan and Pennsylvania’s proposals to use Medicaid managed care organizations to provide care to people covered under those states’ expansion plans. Iowa has a plan similar to Michigan and Pennsylvania’s that’s being implemented.
Several other states have pending proposals. In the past month, Republican-led states Utah, Wyoming and Tennessee expressed interest in expanding the program using federal waivers.
McCrory did not provide any specifics about what changes he wanted to see in order to expand Medicaid, but he did say the first thing he needed is for the General Assembly to pass a plan to restructure the program into one that uses accountable care organizations to manage and deliver care.
The ACO plan was developed last winter after work by the Medicaid Reform Advisory Group, and it won passage in the House. But the plan was rejected by leaders in the state Senate who said they wanted health care providers to carry more financial “risk.” Senate health care leaders have stated their preference for a plan that adds private managed care organizations to the mix.
Legislative gridlock over the House and Senate’s differing views on Medicaid delayed the end of last year’s short legislative session. A committee process this past fall to develop a Medicaid reform plan also ended in gridlock, and at times Senate majority leader Phil Berger (R-Eden) has publicly criticized McCrory over a number of issues.
McCrory said he had “very positive” phone conversations with Berger in December. “We have very strong open lines of communication,” he maintained.
McCrory also said he would be heading to Washington this week to meet with Obama and North Carolina’s Congressional delegation to discuss, among other topics, health care.
Let history guide future
During his address, Wilson harkened back to World War II, when about half of North Carolina’s military recruits failed their physicals and were rejected for service. In response, state leaders created the Good Health Plan, which resulted in an expansion of UNC-Chapel Hill’s medical school, the building of N.C. Memorial Hospital at UNC and other investments in health care infrastructure during the 1940s and ’50s.
He told the gathering that a similar consensus was needed today.
“The folks not being covered are still accessing care and our wonderful provider community continues to provide that care to those people,” Wilson said. He told the gathered business leaders that the lack of payment to doctors and hospitals “also spells pain to you.”
“Part of the insurance premiums that you are paying is a hidden tax on you for the care of the people showing up at the hospital without Medicaid,” he said.
Nonetheless, the N.C. Chamber of Commerce continues to oppose the Affordable Care Act and has declined to take a position on Medicaid expansion.
In a statement provided to North Carolina Health News, the chamber’s press officer, Meredith Archie, wrote that the organization does not believe the ACA is “the best solution for controlling rising health care costs or for providing greater access to health care.”
After his speech, Wilson said in an interview that he believes the past few years’ national dialogue on health care has resulted in business leaders having a better understanding of health care cost drivers. He said he believes more business people are coming around.
“We have more people today who are talking about, understanding and really beginning to grapple with the challenges we face in health care than ever before,” he said.
Wilson also said there’s little time to waste in acting on health care.
“I’m generally optimistic that we’re in a place in this state where if we will do what our history suggests that we do and step up and step out and provide the leadership, we will figure this out,” he said.
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