By Rose Hoban
Two years ago, a group of Republicans in the North Carolina House of Representatives made a splash when they defied their party’s orthodoxy: They wanted to provide a way to get hundreds of thousands of low-income North Carolinians access to health insurance via the state’s Medicaid program.
But they didn’t say they were “expanding Medicaid,” they called it Carolina Cares.
This year, the same quartet of lawmakers are back, this time with a bill they’re calling the NC Health Care for Working Families Act. Again, Rep. Donny Lambeth (R-Winston-Salem) said that this was “a North Carolina solution.”
Just don’t call it “Medicaid expansion.”
Nonetheless, the bill uses the mechanism of the Medicaid program to cover people who fall in the “coverage gap” between the very low-income and disabled people who currently qualify for Medicaid, and people who earn enough to purchase subsidized health insurance on the online marketplace created by the ACA.
Lambeth estimated that about 543,000 people would end up gaining coverage through the proposal:
- 282,782 would be new participants
- 195,639 would be people who move from other plans
- 64,587 would be people with disabilities who would be newly eligible
“North Carolinians work very hard for their money. And we’re not asking them to fund this program in any respects,” he said. “Just the opposite, it will actually save money for the state of North Carolina.”
He called it “an insurance alternative for working, low-income individuals.”
Work, wellness checks mandatory
Lambeth and bill co-sponsor Rep. Greg Murphy (R-Greenville) both emphasized that what these low-income people (earning between about $25,000 and $34,600 for a family of four) will get will function like insurance.
“Each of these individuals will actually have an insurance card coming from either Blue Cross Blue Shield, Aetna, Cigna, they will have an insurance card just like anybody else has insurance,” Murphy said.
But different from the Medicaid expansion plan offered early this session by Democrats, the Republicans’ plan includes a requirement to work for many of the recipients. But there would be exclusions from that work requirement for people caring for children, someone with a disability or a disabled parent, people who are determined to be “medically frail,” pregnant and post-partum women, people engaged in substance abuse treatment programs and Indian Health Services beneficiaries.
Lambeth said the work requirement was a matter of political expediency, to get the bill passed.
“There are things that sometimes we as legislators have to do to get things done,” he said. “As I talked to lots of colleagues, that seemed to be a predominant area, that they felt strongly that if we were going to pass any legislation to close the coverage gap, we had to have some type of work requirement.”
He also said that there would be a requirement that beneficiaries pay 2 percent of their annual income in premiums and if a person fails to pay for three months, they’re dropped from the rolls until they pay their unpaid fees.
Recently, a federal judge struck down similar work requirements in the Medicaid expansion programs in Arkansas and Kentucky. In Arkansas, some 17,000 were struck from the state’s Medicaid rolls for not fulfilling work requirements.
Lambeth did say that the bill’s rollout was delayed a week as he and his co-sponsors tried to find a way to address the ruling by Judge James Boasberg.
In many ways, the plan resembles those in other Republican-led states that have embraced Medicaid expansion, but Lambeth also added several unique aspects. First among those is a requirement for participants to engage in preventive and wellness activities.
“You’re not going for your checkups, you’re not seeing your physician, you’re not managing a condition that you have, you also could be eliminated from the program,” he said.
Lambeth, who worked as a hospital administrator before running for the legislature, said prevention is the key to reining in health care costs.
“We are not going to change the cost curve in North Carolina or in this country until we address preventive care and wellness aspects of health care,” he said. “We must begin to address that in a more proactive way that we seem to not really want to do.”
Shuffling the money
What is similar to other states is the way that the lawmakers propose to pay for any added costs. One mechanism for payment is through a tax on the managed care companies that will take over running the Medicaid program later this year, generating an estimated $364 million over five years. This tax is similar to what is done in states such as Louisiana and Oregon.
Over time, the annual revenue from this premium tax would fund a grant program to benefit the health care needs of rural areas.
“Those grants can be used in a variety of ways,” Lambeth said. “I hear from rural legislators about difficulty recruiting physicians, retaining physicians, and they’re looking for ways to be very creative and helping physicians attracted to their communities, and this will be a way to do that. Expand things like telehealth… startup funding for new clinical services in their community.”
Another mechanism is by levying an assessment on providers such as hospitals, who will eventually benefit by having fewer uninsured patients show up at their doors. States such as Virginia, Colorado and Arizona have paid for their expansion programs through such fees.
Finally, as what was done in Ohio, the bill drafters worked into their plan language that pulls North Carolina back from providing this coverage if the federal government were ever to renege on providing an enhanced matching rate on these patients.
At this point in the implementation of the Affordable Care Act, the federal government is paying 90 percent of the costs of any expansion beneficiaries.
“We’re going to ask for more than that, we’re going to ask for 100 percent,” Lambeth said. “We don’t know if we’ll receive that.”
Lambeth said all told the costs would not fall to the state’s General Fund but would accrue savings, in part through better reimbursement for care provided at state-run psychiatric hospitals.
“And so the state subsidy subsidizing the mental health hospitals, and other state hospitals and facilities actually would go down to the tune of about $60 million a year,” he said. “And that’s money, we can take and redirect into other programs like education, and other safety programs that we very much need more resources in.”
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With all due respect to Dr. Greg Murphy, he just claimed on the Tom and Sadie Show that the Carolina Cares (N.C. Health Insurance for Working Families Act) bill he sponsored in the State House is not Medicaid expansion. It most certainly is. It is a backdoor way to appear to have a conservative alternative while essentially mirroring all the requirements and obligations and costs associated with Medicaid expansion. – Gary Ceres, candidate for 3rd Congressional District of North Carolina