By Rose Hoban

Throughout this coronavirus pandemic, North Carolina’s public health leaders have announced many new initiatives to help fight COVID-19, prongs in an attack plan that come with varied price tags.

The General Assembly appropriated $345 million this spring to the state Department of Health and Human Services to help mitigate the damage the novel coronavirus was expected to cause as it ripped through North Carolina.

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On Tuesday, Mandy Cohen, the DHHS secretary, attached numbers to those COVID-19 initiative price tags for legislators who control the state’s purse strings.

Her presentation came with a caveat. The first infusion of federal dollars totaled about $6 billion, of that, the legislature in May appropriated about $1.6 billion to state agencies that needed to respond to the changes wrought by COVID. The $345 million doled out by state lawmakers has been helpful to a public health system that has seen more than its share of cuts over the past decade.

More will be needed to continue to fight COVID-19, Cohen said.

More than half a billion dollars has also come directly to North Carolina for pandemic-related expenses. Congress has been deadlocked over how much may be in the next round of help.

Medicaid, the combined state and federal program that provides health care coverage for low-income people, has been instrumental in getting many people’s care paid for through enhanced federal rates for COVID-19 care. That’ll come out to around a half-billion dollars in federal spending as well.

What is North Carolina getting for all that spending?

Cohen pointed out recent “glimmers of hope” in North Carolina’s trends and metrics. She told lawmakers about massive testing campaigns in which the percentage of positive cases is on the decline from highs of 10 and 11 percent. The hospitalization rate has recently stabilized, she added, and the rate of death caused by COVID-19 has started to slowly tick down.

Chart courtesy: NC DHHS

“We have avoided both that first surge that we saw in the Northeast, and we have avoided this second surge that we are seeing in the South — that we see in states around us that have boiled over to where they are having major surges and … seeing their hospital systems maxed out,” Cohen told the lawmakers on a day when Florida reported a record 276 deaths. “We have not seen that here in North Carolina.”

Cohen didn’t sugarcoat anything for the lawmakers on the Joint Legislative Oversight Committee on Health and Human Services on Tuesday, telling them that COVID-19 wasn’t going away any time soon and that high-level spending would last well into next year.

Ever the advocate of the three Ws, Cohen told lawmakers that one inexpensive measure has helped bring down rates of infection and will hopefully carry over to hospitalizations and deaths: Wearing face coverings.

State Dollars

Cohen described the money for COVID-19 prevention and mitigation activities as coming in three buckets. The first, that $345 million noted above, came to North Carolina by way of Congress, which passed the Families First Coronavirus Response Act and the CARES Act this spring, sending billions to states to help them in their disease-fighting efforts.

That included $125 million for testing and contact tracing, those efforts to identify people with COVID-19 and then try to track down all of the people the infected were in contact with to warn them of the potential exposure.

“At a high, we were doing about 30,000 tests a day, on average,” Cohen said.

The secretary noted that in the past week, the number of administered tests dropped off, with fewer people coming in for testing overall. Her public health team was trying to find out what was behind the sharp drop-off.

North Carolina was where Hurricane Isaías hit landfall early last week, and the coming storm could have caused some testing sites to close or reduce hours. But that did not fully explain the decline.

“We’ve talked with a number of our other states about that, and actually, they’re seeing a lot of the same thing,” she said. “We all are hypothesizing together, it’s a combination of you know, summer vacations, we had to pull down a number of our testing sites because of hurricane and heat.”

Cohen also said that one issue that may be dissuading people from testing had been the high turnaround time for test results, sometimes as long as 10 days, something being driven by a nationwide lack of lab materials.

“We think that also had some backlash and people saying, ‘Well, maybe I won’t get tested, it’s taking so long,’” she said. Cohen reported to lawmakers that, in particular, commercial labs’ turnaround times for testing have dropped back into the three- to five-day range.

The $125 million allocated for testing, Cohen noted, came with the stipulation that it be spent by the end of the year, long before the COVID-19 crisis is likely to be over.

“I’m very hopeful that there’ll be more money coming in,” Cohen added, referring to proposed Congressional action. “I can’t be sure of that yet.”

The state has hired more than 650 people to help with contact tracing, in addition to the local health departments that already had contract tracers on staff. In addition, the state is looking to hire 200 caseworkers to help support people who test positive, whether through helping them get into housing to separate themselves from family as they quarantine, or helping them get food, transportation and other help while they’re sick.

Other big pots of money allocated for COVID relief include $75 million for enhanced mental health and crisis services, and lately, the state has been spending millions on testing all of the residents and staff of North Carolina’s nursing homes. Inspectors have also gone into each of the homes to see that they’re complying with infection control measures.

“If there’s any deficiencies, we cite them, we require them to make those changes,” Cohen told lawmakers.

The state recently spent $14 million to test every nursing home resident and staff member, and last week Cohen ordered nursing homes to test staff members every two weeks, something that will cost about $25 million through November.

Other allocations include:

  • Offset the extra costs of caring for patients in nursing homes: $25 million
  • Support for rural communities: $50 million
  • Early childhood initiatives: $20 million
  • Nutrition programs: $25 million

Federal dollars help out the state 

In addition to allocations from the General Assembly, Cohen said other federal grants have helped North Carolina with pandemic-related costs.

For example, Congress sent an additional $118 million in child care funds to help increase the pay rates for child care centers that stayed open in the spring when the statewide stay-at-home order was in effect. Some of that money paid for child care subsidies for low-income workers deemed to be “essential” employees.

Another $47 million in federal aid went to nutrition programs for children in day care centers, as well as for people in group homes and family care centers. Some 2 million meals have been provided to older adults and people with disabilities unable to leave home.

“In addition, there was some direct appropriation for the food banks obviously to support the food banks and purchasing extra food,” said DHHS Deputy Secretary Susan Perry. “As you know, the food banks have been very active and very busy during this period.”

Medicaid dollars play a role

Other federal funds have come to the state in the form of an enhanced federal matching rate for the Medicaid program.

Usually, federal dollars pay for 66 percent of what North Carolina pays for care by a doctor, hospital or other provider, but at the beginning of the pandemic, Congress bumped up each state’s federal match rate by 6.2 percent through the end of the year. This means that federal coffers now pay for more than 72 percent of all the care being delivered to Medicaid patients.

Cohen said that would total about $500 million in costs that the state would not have to bear.

She also pushed lawmakers on the issue of Medicaid expansion, an issue that caused a protracted budget battle between the governor and the legislature last year, resulting in a standoff.

Currently, an adult needs to earn less than $12,760 a year and have a disability in order to qualify for Medicaid. But under the provisions set out by the Affordable Care Act, states can choose to cover people earning up to 135 percent of the federal poverty level, or $17,226, with federal dollars paying for 90 percent of the cost.

In North Carolina, hospitals have stepped in and said they would cover the last 10 percent of the cost of that care.

“Before COVID, we knew that about 500,000 folks would be able to be eligible for Medicaid expansion,” Cohen said. “If we were to expand, we know that number is higher now. I think the numbers are moving around enough that we haven’t been able to precisely say.”

“We know it’s north of half a million folks.”

Sen. Jim Burgin (R-Angiers) asked Cohen how much the state would have saved had lawmakers expanded Medicaid eligibility to the half-million or more low-income North Carolinians who would have been eligible for the federal benefit before the pandemic.

“They are certainly very large chunks of money that we have put forward to treatment to covering testing, the covering other kinds of treatment that would have been picked up if we had Medicaid expansion,” Cohen, a staunch advocate for Medicaid expansion, responded. “Because we don’t have Medicaid expansion, for example, we are putting $50 million into mental health. We absolutely should do that. But we wouldn’t have to do it if we had Medicaid expansion because we’d have another payer source to fund that. And then we use those $15 million for getting to even more folks.

“My point is, is that why aren’t we using every tool that’s out there to maximize how much federal support is coming to our state, particularly when Medicaid expansion doesn’t require any state dollars,” she said. “We should be reaching for all that federal support at this moment in time to respond to this crisis, particularly a health crisis.”

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...

One reply on “The COVID-19 price tags: Here’s how NC DHHS is spending $345 million”

  1. Also, another follow-up the $345 million in Covid-funding—I see no money being used to take disabled children off the waiting list for Medicaid waiver services! These children/young adults are not in school and day programs with specialized services meeting all their educational, behavioral, physical therapy, occupational and speed therapy goal. The disabled children are at home full-time and parents are in need of services! Their lives have been turned upside down even more during Covid and are in crisis trying to manage all their children’s needs! As a mother of a disabled adult son, I have great empathy for these parent and we must call attention to this and advocate for our most vulnerable children and families.

    This need should have been a very high priority on the list and definitely before the million and a half that went for people with aids!

    Thank you,

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