Medicaid costs to Randolph County disputed by state officials

Jul. 27--ASHEBORO -- An estimate of the impact of Medicaid expansion on Randolph County is being disputed by officials at the state level.

As the debate over expanding Medicaid in North Carolina heated up in Raleigh, Randolph County's commissioners asked for and received an estimate for local costs associated with a possible expansion. At their July 8 meeting, the commissioners heard a cost projection by Tracie Murphy, director of the Randolph County Department of Social Services (DSS).

Murphy, basing her estimate on an expected 10,800 increase in the number of Medicaid beneficiaries, said that increase in new clients would require a minimum of 32 new DSS staff members as well as office equipment. The additional staff would be necessary, she said, to support the added caseload.

Murphy estimated the cost of the 32 staff members and the necessary office equipment at $1,768,916. She said Medicaid costs are currently split between the federal government (67 percent) and the state (33 percent). With Medicaid expansion, under the Affordable Care Act also known as Obamacare, the federal government has pledged to pay 90 percent of the added cost.

Murphy concluded that, using the current cost share, the approximate share for the county would be $702,072.

Not so, according to representatives from AARP North Carolina and NC Medicaid under the NC Department of Health and Human Services (DHHS).

Steve Hahn and Mark Hensley, both with AARP North Carolina, refuted Murphy's report to the commissioners, saying the net cost to counties in the event of Medicaid expansion is zero. Both said the cost to counties of expansion would be paid for by federal dollars (90 percent) with the rest coming from assessments to hospitals, medical providers and Medicaid health plans.

In a letter to the editor, Hensley said, in part, "I was baffled by the figures ... . There will be NO additional cost to the county if we were to expand Medicaid to cover those in the coverage gap -- the people who don't currently qualify for Medicaid and make too little to get a subsidy on the healthcare exchange. ...

"Let's be clear, 100 percent of county costs of expansion are paid by the federal government, hospitals and health plans. This includes administrative costs. ...

"As North Carolina has one of the highest rates of people without health insurance, county-run health facilities and local hospitals often have large amounts of uncompensated care. Counties, like Randolph, will now be able to bill for care that was previously uncompensated, improving their bottom line. ... If we were to expand, more than 10,000 Randolph County residents could get affordable health insurance. Think how this could help our hospital, and the people in our community!

"In addition, closing the health coverage gap would be an engine for economic growth that creates over 37,000 more jobs in North Carolina by 2022. It would also increase state and county tax revenues by over $600 million from 2020 to 2022. In Randolph County alone, 508 new jobs would be created, $1,783,000 million in tax revenue would come to the county and we are estimated to have more than a $95 million increase in economic growth in our county.

"Let's get the numbers right. Medicaid expansion would be good for Randolph county."

Dave Richard, deputy secretary of NC Medicaid, a division of DHHS, confirmed what the AARP officials were saying. "The county will not have to pay for additional positions" related to the expansion of Medicaid, he said. "The costs are borne by both federal dollars and assessments levied by the state on hospitals. The Medicaid program for years has drawn money from hospitals, nursing homes and group homes. The state uses that money to pay providers."

Under the current system, in which there is a Medicaid coverage gap, emergency rooms are required to serve uninsured patients, Richard said. With expansion of Medicaid, there would be more patients with insurance coverage and hospitals would benefit by being able to recoup payments for those services.

In addition, Richard said, Medicaid would work with counties to manage the added cost of administration without the use of state funds. That would be true, he said, even if DSS had to expand its facilities.

He went on to say that expanding Medicaid in North Carolina would not involve new taxes at either the state or federal level. "Money from our payroll taxes goes to a Medicaid pot" in Washington, D.C. "North Carolina citizens are paying in and not getting the advantage of expansion," Richard said.

In an email, Richard's office sent the following quote: "The federal government passed a permanently enhanced Medicaid expansion match rate that does not require reauthorization. That means the federal government's commitment to paying 90 percent of expansion costs is locked in indefinitely barring a change in federal law.

"Expansion would not require the General Assembly to use general funds. The federal government would pay 90 percent of costs, and the remaining 10 percent would be funded by hospital assessments and the premiums of newly-covered Medicaid recipients. These state and federal funds would cover 100 percent of Medicaid expansion costs including county expenses.

"Expanding Medicaid is fiscally responsible. NC taxpayers are paying for Medicaid expansion in other states, and this is an opportunity to bring some of those federal tax dollars back home."

In addition to confirming figures used by Hahn, Richard's office added the following information concerning benefits for counties by expanding Medicaid:

--All county costs of expansion, including administration, are paid by the federal government, hospitals and health plans.

--As North Carolina has one of the highest rates of people without health insurance, county-run health facilities often have large amounts of uncompensated care. Counties will now be able to bill for care that was previously uncompensated, improving their bottom line.

--Rural hospitals (including Randolph Health) are disproportionately impacted by uncompensated care, and preferentially benefit from closing the coverage gap. In North Carolina, five rural hospitals have closed since 2014. Nationwide, 82 percent of rural hospital closures in the last five years have been in states that have not closed the coverage gap.

--In Ohio, physician and nurse participation in the Medicaid program increased after the state closed its coverage gap to meet the increased demand. After Michigan closed its coverage gap, the availability of health care appointments for Medicaid enrollees improved.

--Access to treatment for opioid use disorder increased and opioid overdose deaths decreased in states that closed the coverage gap. For example, Kentucky saw a 700 percent increase in Medicaid substance use disorder treatment after closing its gap. Dayton saw a more than 50 percent decline in opioid deaths, which is exemplary of declines in states that closed the gap. In addition, for states that closed the gap, the uninsured rate for opioid-related hospitalizations plummeted by 79 percent, from 13.4 percent in 2013 (the year before expansion implementation) to 2.9 percent in 2015.

--In states that have closed the coverage gap: More babies live to their first birthday, fewer women die during pregnancy, enrollees experienced improved mental and physical health, the share of people with uncontrolled diabetes and hypertension dropped, and the number and severity of hospitalizations for certain conditions dropped. Closing the gap was associated with earlier cancer diagnosis, improved access to cancer treatment and fewer deaths from cardiovascular disease.

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