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By Rose Hoban
For four years Republicans at the North Carolina General Assembly have, as a body, staunchly refused to consider Medicaid expansion. But on Tuesday morning, four House Republicans outlined a way to increase health insurance access for people who have fallen into the Medicaid “gap” – they make too much to qualify for Medicaid outright and too little to qualify for insurance subsidies offered through the Affordable Care Act.
“This is offering an insurance product for the working poor, for the state of North Carolina,” said Rep. Greg Murphy (R-Greenville) a practicing urologist when he’s not at the legislature and one of the bill sponsors. “These are actually folks that I see on a regular basis as a physician, who at present, do not qualify for Medicaid and cannot afford insurance at its present rates.”
In broad language, House Bill 662 seeks to build on the ability to draw federal funding for expanding the Medicaid population to North Carolina. The bill’s sponsors propose using those funds to pay for more than 90 percent of the cost, the remainder would come from assessments to hospitals around the state and some amount in the form of premiums totaling 2 percent of a beneficiary’s annual income.
An analysis of the bill released Tuesday afternoon by the NC Institute of Medicine calculated that, in total, the premiums paid by approximately 375,000 enrollees would cover about 3 percent of the cost of the program.
“Low income people are prideful people, and they don’t always want what we consider a handout,” said Rep. Donna White (R-Clayton), a nurse who recently left her job with the state Department of Health and Human Services. She said workers will have “the pride that will come to them knowing that they are actually providing health coverage for their families and paying for it.”
The big question is whether their Republican colleagues in the rest of the House and in the Senate will go along with the plan.
Rep. Donny Lambeth (R-WInston-Salem) explained that right now, people who have insurance are paying, in part, for those people who don’t. People without insurance often wait until they’ve gotten sick before heading to a nearby emergency room, where they cannot be turned away.
“Because many of these residents lack adequate resources to pay the providers… the hospitals or the doctors absorb the full cost of care,” he said. “This cost is then passed along to individuals with insurance through higher premiums, often referred to as cost shifting.”
Lambeth, who spent decades as a hospital chief financial officer, and then CEO of Baptist Hospital in Winston-Salem, said when he would negotiate rates with insurers, there was often 30 or 40 percent added onto rates to cover that uncompensated care.
The people who wrote the Affordable Care Act reduced reimbursement for the Medicare program, which covers seniors and people with disabilities. That money was originally intended to be replaced by the extra people getting Medicaid, thus relieving the cost shifting. But when the Supreme Court ruled that Medicaid expansion could be considered optional for states, that balance was disrupted.
“Medicare payments have already been cut or reduced $900 million to our North Carolina hospitals and future cuts are estimated at $800 million a year for the next 9 years,” Lambeth said. “Under our proposed model, these would be flowing back to North Carolina through the federal support that we anticipate.”
The program, being called Carolina Cares, has several features. Enrollees need to:
• have a gross annual income of less than 133 percent of the federal poverty level ($21,599 for a couple, $32,718 for a family of four);
• be between the ages of 19 and 64;
• be employed or engaged “in activities that promote employment” such as school or training or seeking a job or;
• be a veteran in transition from being in the military to finding civilian work.
Exceptions would be made for people with health problems or who are caregiving or have unspecified “financial hardship.”
And enrollees will be required to have annual physicals and undertake appropriate screenings such as colonoscopies, mammograms and other preventative care, along with keeping up with their monthly premium payments, which would top out at about $27 per month.
Helping the medicine go down
Lambeth said he’s been thinking about finding a politically palatable way to get more low income people covered. His plan looks somewhat like the one adopted by Indiana, which requires premiums, but Obama administration officials had turned down states that wanted to add a work requirement.
Last fall’s election changed that, and now several other states – such as Arizona and Kentucky – are tinkering with proposals which would require work in exchange for getting expanded Medicaid benefits.
Lambeth also said the legislature needed to get Medicaid reform out of the way before considering expansion.
“We felt like that was our highest priority,” he said.
But once that was done, he started researching how to get more people covered. And Lambeth said he thinks this outline will be attractive to his Republican colleagues.
“Once I go through the facts of this program, the benefits of this program and can articulate the benefit to providers and the benefits to rural North Carolina I think we’ll have some healthy discussions around that,” he said.
Reaction from the other side of the aisle was immediate.
John Ager (D-Fairview) was one of about a dozen Democrats who received a briefing from officials from the state Department of Health and Human Services on Tuesday afternoon.
“While there’s some conservative elements in it that worry me, I think it has real possibilities for insuring people and shoring up our hospitals,” he said.
Ager, who’s a successful farmer, said he hears about other smaller farmers, “who owe thousands and thousands of dollars and have no hope of paying for it. This could be a stopgap for many of those families.”
Samantha Cole, a spokeswoman from Gov. Roy Cooper’s office, said Cooper will be watching the plan closely as it moves through the legislature.
“Making North Carolina healthier and increasing access to health care is one of Governor Cooper’s top priorities, and so is bringing the millions of dollars North Carolina has sent to Washington for other states back home,” Cole wrote in an email.