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Senate Bill 4 would compel North Carolina to reject parts of the Affordable Care Act, refusing the optional Medicaid expansion and foregoing a state-federal health benefits exchange for one run by Washington.
By Rose Hoban
North Carolina looks to be on the fast track to reject an expansion of Medicaid, decline to create a state-based health insurance exchange and send federal health care planning dollars back to Washington.
House lawmakers in the General Assembly took up a Senate bill Tuesday morning to reject many key provisions of President Obama’s Affordable Care Act in committee. After a several hour long discussion, with amendments to the bill offered by a Democratic lawmaker, the joint Health and Human Services Appropriations committee voted 16-7 to move SB 4 to the House floor for a vote.
That bill moved through the Senate easily last week, along mostly party lines.
House leaders have not indicated when they’ll vote on the bill.
Last summer, committee co-chair Justin Burr (R-Albemarle) said he supported creating a state-based health insurance exchange. But he said he now believes it’s not in the best interest of the state.
“Every day it seems like there’s new information,” Burr said. “The more we learned, the more we realized we don’t have any control. It’s really an illusion. And it’s a feel good thing to say we have a state-based exchange, but really it’s a federal exchange that the state is permitted to operate exactly as the feds want.”
Governor ready to sign bill
Earlier Tuesday, Gov. Pat McCrory released a statement supporting the legislature’s decision to not participate in parts of the Affordable Care Act, often known as Obamacare.
In his statement, McCrory said the current Medicaid system is “broken and not ready to expand without great risk to taxpayers and to the delivery of existing services to those in need.”
McCrory also cited uncertainty in the regulations being handed down to states by the federal Department of Health and Human Services. He also said the state had not prepared for creating a state-based health benefits exchange over the past year.
The governor’s statement is a reversal from last week, when he sent a letter to lawmakers moving the bill through the Senate asking them to slow down work on the issue.
The committee room was filled with high-ranking state officials, lobbyists from the health care industry and doctors wearing white coats standing in the back of the room. A number of professional organizations had submitted letters of support for a Medicaid expansion, including the N.C. Hospital Association, the N.C. Medical Society and one from health care underwriters. Their lobbyists were in the room.
An amendment offered by Rep. Verla Insko (D-Chapel Hill) would have given the state Department of Insurance more ability to deal with disputes between consumers and insurers. She said the way the bill is written makes it difficult for the DOI to intervene if insurers don’t abide by federal provisions of the Affordable Care Act that have already been implemented, such as the provision allowing children under 26 years old to remain covered under their parents’ policies.
insko said consumers in the state would prefer to go to the state DOI to get issues resolved, not a federal authority.
Rose Vaughn Williams, general counsel for the Department of Insurance, said the amendment would be helpful.
“Without clear authority from the General Assembly … we’ll try to do our job and enforce what we can,” Williams said. But she said disputes could become difficult to resolve “if individuals have problems with their health insurance company, that maybe some of the provisions of the new act are not being followed. Maybe you are being charged more for preexisting conditions, or maybe your child is not being allowed to stay on your health insurance policy even though he or she is within the age limit.”
Committee co-chair Justin Burr said the legislature would find a way to resolve this problem, but to do it in this bill would not be the “best possible solution.” The amendment failed on a party-line vote, 14-7.
Insko also floated an amendment to authorize expansion of the Medicaid program for the first three years only, while the federal government pays 100 percent of the expense. The bill would sunset at the end of three years.
“When we have people who are uninsured, they’re a lot sicker than the general population. The way to save money in health care is to keep people well. It costs less money to provide health care to well people than it does to sick people,” Insko argued. “We need the federal government to pick that cost up. If we delay, we lose that window.”
“This is exactly what’s wrong in our country; it’s the fact that the federal government constantly comes and dangles some dollars down in front of our faces and we think that we have to grab it, and we have to take those dollars,” Rep. Burr retorted. “And then we forget that when we take those dollars, there’s all kinds of strings attached to it. And it puts the citizens of this state on the hook for many, many years to come for something that’s advertised as … free money. There’s no such thing as free money.”
The amendment failed along party lines, 14-7.
Debate over Medicaid costs
An analysis published last month by the N.C. Institute of Medicine found the state would save about $37 million in 2014, in part because the state would not be paying the costs of caring for uninsured patients. Institute of Medicine vice-president Adam Zolotor said many patients currently paid for by state dollars – such as mental health patients and patients in prison – will be covered by Medicaid instead.
Zolotor said savings to the state would grow over time because of new tax revenue generated by about 5,000 newly employed medical personnel and growth in the state’s gross domestic product.
And an estimate from Steve Owen, chief business operating officer for the Division of Medical Assistance, has found that the state would save money by expanding for the first three years. In 2018, the expansion would cost the state $7.8 million, as the federal contribution to expansion funds drops from 100 percent to 90 percent of the costs.
But lawmakers downplayed the estimates, saying there are too many questions about the federal regulations to make accurate predictions.
“A lot of the Affordable Care Act is still being written, and it’s being written by the federal HHS and being massaged and changed and altered,” said Rep. Nelson Dollar (R-Cary). “I don’t think there’s any member of this committee that can sit here today and lay out all of the cost numbers for us.”
“If someone can do that, great; then we should consider moving forward. But I don’t think we’re there yet.”
The governor also concurred with technical corrections in the Senate bill that would allow the state to ask for federal money to continue development of a state computer system – NC FAST – that will be used to determine eligibility for Medicaid and other programs.