By Rose Hoban
Alex Hitt was on the leading edge of the sustainable farming movement in North Carolina. He and his wife, Betsy, started Peregrine Farm 36 years ago on a 26 acre property in Alamance County, where they grow vegetables, flowers and blueberries.
A few years ago, before the Affordable Care Act was enacted, the costs for health insurance were about $9,000 a year for Alex, Betsy and their one full-time employee.
“That was roughly 10 percent of our gross farm income,” Alex Hitt said. Now, the cost would be more like $25,000 per year, if not for the ACA. “I figure it would be about 20 or 25 percent of our gross farm income, which is unsustainable.”
Hitt said he and Betsy have always prioritized buying insurance, in part because he’s seen bad stuff happen to friends who didn’t have it and then were struck with an illness or injury.
“The number one failure of farms is not a crop failure, or weather, or bad import competition, or whatever the hell it might be,” Hitt said. “It’s someone gets hurt, or gets sick, and they can’t pay the bills and they have to sell the farm.”
It’s people like Hitt who are being targeted in a bill that would offer Medicaid coverage to people who earn too much to qualify for Medicaid and too little to qualify for insurance subsidies under the Affordable Care Act.
In a statement released last week, sponsors of House Bill 662 said the bill is aimed squarely at helping “working adults, farmers, fishermen, members of the clergy, small business owners, volunteer firefighters, service workers, caregivers and more than 12,000 veterans.”
The bill, called Carolina Cares, would expand the state’s Medicaid program, although sponsors prefer to say the program would provide insurance options for low income workers.
But Medicaid expansion it is, in a manner similar to how the state of Indiana expanded the program, requiring beneficiaries to work, and asking them to pay a small premium, two percent of household income.
The program would be targeted to people earning less than 133 percent of the federal poverty level, which for a couple like the Hitts would be $21,300 per year. Those monthly premiums would top out at about $27 per month.
Alex Hitt said he and Betsy together earned just enough to qualify for health insurance subsidies under the ACA.
“Small farmers, you know our income puts us barely above the poverty line,” he said.
But if their income were to drop, say, because of a bad blueberry crop from that late frost in March, they would be eligible for insurance under Carolina Cares.
There would be exceptions to the work requirement, for example, people who have a medical or financial hardship, those who are occupied as full-time caregivers for a child or a disabled family member, people who are being treated for substance use, and people who are “medically frail.” There’s also an exception for veterans who are transitioning out of service and seeking employment.
“What it’s doing is requiring people to have some skin in the game,” said bill co-sponsor Rep. Greg Murphy (R-Greenville), a urological surgeon when he’s not at the legislature.
The work requirement may not make much of a difference according to research conducted by the Kaiser Family Foundation which found that nationwide 59 percent of people being covered by Medicaid expansion are working poor.
For the people covered under other states’ Medicaid expansion plans who are not working, about a third are disabled or ill, about a third are caregivers, and the rest are in school, are retired or unable to find work, similar exceptions to those listed in HB 662.
Murphy said that under Carolina Cares, people participating in the program would also be required to have a primary care doctor and to engage in wellness activities, such as annual screenings.
“They have to pay a little bit, participate in some health programs, keep healthy living and if they do that, great, we’re happy to support them,” he said.
Aside from premiums, the funds to pay for the program would come from federal Medicaid expansion dollars which cover more than 90 percent of the cost for new beneficiaries. The balance would be paid by hospitals, something suggested by Gov. Roy Cooper this winter when he proposed expanding Medicaid soon after his inauguration.
That proposal is stuck in the courts for now.
According to the bill’s primary sponsor Rep. Donny Lambeth (R-Winston-Salem), not only would the state not pay for insuring as many as 500,000 extra beneficiaries, but the state would save Medicaid dollars.
“The legislative fiscal research division told me that under a conservative forecast under the current funding models, there’s an approximate $45 million savings to North Carolina,” he said.
He also argued that people who have commercial insurance would end up benefitting as well, because people who come into emergency rooms and people who don’t have insurance get care they can’t pay for. Hospitals then write that off as uncompensated care.
“And guess what [hospitals] do… they cost shift those uncompensated services to the private payer,” he said.
Lambeth, who spent decades as a hospital chief financial officer, and then CEO, said when he would negotiate rates with insurers, there was often 30 or 40 percent added onto the rates to cover that uncompensated care.
“It’s a hidden tax that people don’t recognize or talk about,” he said.
Four Republican House members sponsored the bill, which quickly drew a handful of Democratic co-sponsors, and Lambeth said he believes the bill has a good chance in the House of Representatives.
But selling the bill to the Senate may be harder. When asked, Sen. Tommy Tucker (R-Waxhaw) who sits on the Senate Health Care Committee said he didn’t even know why Lambeth had introduced the bill, especially now that Congress is planning to repeal the Affordable Care Act.
“I don’t know why it would come about now. It’s beyond me,” he said.
Lambeth said he wanted the chance to sell the bill to the Senate and wanted to ask his colleagues in the other chamber to “keep an open mind.”
But he acknowledged that four years of hardened positions regarding Medicaid expansion might be the hardest barrier to overcome.
“I’ve been here long enough to know that when people stake themselves out and have a position, it’s awfully hard to move them, right or wrong,” he said. “I’ve put myself in that category and I’ve locked in on something and no debate’s gonna change my mind.”
But he said that lawmakers have a “unique opportunity.”
“Keep an open mind and if I can sell you, great, and if I can’t, we’ll see what else we can work on.”