shows a red cross with the word Medicaid printed on it, in front of a pile of dollar bills. For Medicaid transformation

By Taylor Knopf

Last week, the Trump administration gave the green light to states seeking to add a work or community engagement requirement for “non-elderly, non-pregnant adult Medicaid beneficiaries” who qualify for the program but not do not have a disability.

Medicaid, first passed in 1965, gets its funding from states and the federal government, which gives federal regulators leverage to make decisions about the design of individual states’ programs. In North Carolina’s case, the federal government matches two dollars on average for every dollar put in by the state. But with provider assessments, grants and reimbursements the state only pays about a quarter of North Carolina’s annual tab for the program.

The program covers mainly low-income children, and some of the parents for children up to the age of five. It also covers care for low-income pregnant women and people with disabilities. The largest single chunk of funding covers low-income seniors, with the most expensive population being those who live in nursing homes.

pie chart describing the different funding streams going into Medicaid: federal dollars, then state dollars, then receipts, grants and other income
Who pays for Medicaid in North Carolina? Chart courtesy: NCGA Fiscal Research Division

The Centers for Medicare & Medicaid Services (CMS) sent a letter to state Medicaid directors announcing the change, which at least 10 states included in their 1115 Medicaid waivers. North Carolina is one of them.

“Such programs should be designed to promote better mental, physical, and emotional health in furtherance of Medicaid program objectives,” the letter states. “Such programs may also, separately, be designed to help individuals and families rise out of poverty and attain independence, also in furtherance of Medicaid program objectives.”

According to CMS, the goal is for states to test this theory: requiring work or community engagement as a condition of insurance coverage will result in improved health and well-being.

North Carolina advocates and officials vary widely on this theory.

While North Carolina’s Medicaid waiver does not explicitly include a work requirement, it does include language for a bill introduced at the state house last year called Carolina Cares.

House Republicans wrote the legislation as a way increase health insurance access for people who have fallen into the what’s called the Medicaid “gap.” This means they make too much to qualify for Medicaid outright and too little to qualify for insurance subsidies offered through the Affordable Care Act.

The future of Carolina Cares

The Carolina Cares plan — though considered an “insurance product” and not Medicaid expansion by its authors — includes a work requirement.

The original plan made exceptions for people with health problems or who are caregiving or have unspecified “financial hardship.”

Rep. Greg Murphy (R-Greenville), a sponsor of Carolina Cares and an active physician, explained the philosophy behind adding a work requirement.

“This was the problem with the ACA’s original inception, it allowed abled bodied individuals who could be working or could seek work to get health insurance,” he said. “People have to have skin in the game. There’s personal responsibility.

“I believe our bill requires that. I think the individuals who would benefit from this really are happy for that. These people want to work. It’s not up to the taxpayers to fund health insurance for people who do not desire to work.”

The legislation did not get a lot of traction during the 2017 session. However, Murphy doesn’t think it’s going away quite yet.

Murphy stands at a podium speaking, while the others look on. He stands in front of a large medallion of the state seal.
Rep. Greg Murphy (R-Greenville) told people at a press conference announcing Carolina Cares in 2016 that he often sees low income patient without insurance. “They receive subsequently much more expensive and honestly less effective care,” he said.
Also pictured (l to r): Rep. Donny Lambeth (R-Winston-Salem), Rep. Gale Adcock (D-Morrisville) and Rep. Jean Farmer-Butterfield (D-Wilson).

“I think it definitely does have a future,” he said, adding that he would like to see it move this year.

“This is basically health insurance for the working poor of our state: the farmers, fishermen, clergy, people who earn too much to be on Medicaid regularly, but don’t really earn enough really to be able to purchase health insurance,” Murphy said. “This is our way of trying to reach out and help those individuals who want to work and want to be able to buy insurance to get it.”

Murphy said he was pleased that the state Department of Health and Human Services took into account the wishes of the legislature in the waiver.

Whether Carolina Cares has a future in the Senate remains unclear. The House can unanimously support a bill, but if the other chamber isn’t on board, it’s not going anywhere. (This happened last week with a unanimous push from the House to do something about GenX contamination in the lower Cape Fear River.)

“We typically review and comment on House bills if and when they pass that Chamber,” said Sen. Phil Berger’s spokeswoman Shelly Carver when asked about the potential for Carolina Cares.

In response to a request for comment on Medicaid expansion, Carver referred to an October interview with NC Health News where Berger described Medicaid expansion as a “problem for the state as a whole.”

“I think the expansion of Medicaid actually creates other problems that in my view overwhelm any positive that might be there from the drawdown of additional federal dollars,” he said at the time.

Mixed response

Gov. Roy Cooper sees Carolina Cares as a politically feasible way for more people to get health coverage in North Carolina. The governor doesn’t have the power to expand Medicaid on his own. In 2013, the legislature passed a bill taking that power away from the governor and keeping it with that body. Since then, the General Assembly has not supported expansion.

“The Governor strongly supports Medicaid expansion and has been fighting for it since the day he took office and he realizes that most people who would qualify already are working,” said Sadie Weiner, the governor’s communications director.

“Some state House Republicans support increased access to Medicaid with a work requirement, and although the Governor has serious concerns about that, he’s pleased that there is some movement on this.”

Rob Thompson, senior policy advisor for the advocacy group NC Child, said that adding a work requirement punishes those who are too sick to work.

“Work requirements prevent North Carolinians in need from accessing medical care while doing nothing to address the reasons that low-income families lack access to health insurance,” he said. “In fact, many of the families who would gain coverage under the Carolina Cares proposal are already in working families.”

A work requirement would add an “unneeded and expensive level of bureaucracy to the program that will act as a barrier to insurance for eligible individuals,” Thompson continued.

Ciara Zachary, a health policy analyst from the left-leaning Justice Center agreed, saying the administrative paperwork necessary to keep up with work requirement eligibility would add an extra burden to an already busy Medicaid program.

“That’s a lot of extra information to track and monitor. Keeping up with that might lead to people slipping through the cracks and losing coverage,” she said. “I see this costing the state more than actually lifting people out of poverty.”

The CMS letter specified that states cannot impose work requirements on people classified as “disabled” for Medicaid eligibility purposes. The letter addressed the current opioid crisis and stated that people with substance abuse issues should have access to Medicaid coverage and treatment, whether or not they are classified as disabled.

Laurie Coker, director of the North Carolina Consumer Advocacy, Networking, and Support Organization, believes the Murphy bill embraces a medical model of mental health care at the expense of other approaches. Photo credit: Taylor Sisk
Laurie Coker, director of the North Carolina Consumer Advocacy, Networking. Photo credit: Taylor Sisk/ NCHN file

Laurie Coker, executive director of North Carolina Consumer Advocacy, Networking, and Support Organization, said that Carolina Cares’ work requirement “is not in itself a bad thing.”

She cited a study that shows people with disabilities and mental health issues enjoy better health and life progress when they are employed and are able to work. She said many North Carolinians with mental health problems could work and want to work.

“The problem, though, is that our society has created many barriers that make it difficult for people with psychiatric labels to gain employment,” Coker said. “Further, people have been misled to believe they cannot keep their Social Security benefits and work. So they compromise and their well-being is greatly impacted by this.”She said the biggest challenge of the work requirement would be to incentivize employers to hire people with disabilities.

Defining “community engagement”

The CMS letter broadly defines the requirement to include work or community engagement. This is defined as career planning, job training, job support services and volunteer programs.

“As many Medicaid beneficiaries live in areas of high unemployment, or are engaged as
caregivers for young children or elderly family members, states should consider a variety of activities to meet the requirements for work and community engagement, including volunteer and tribal employment programs, in addition to the activities identified to meet the requirements under SNAP or TANF,” the letter reads.

Asked if he would consider community engagement as an option in North Carolina, Murphy (co-sponsor of Carolina Cares) said he’s concerned about that.

He said that has not been part of the discussion so far and that no one at DHHS had contacted him about that.

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Taylor Knopf writes about mental health, including addiction and harm reduction. She lives in Raleigh and previously wrote for The News & Observer. Knopf has a bachelor's degree in sociology with a...

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