Medicaid expansion bill clears NC HouseMedicaid expansion bill clears NC House; fate in Senate unclear

The fast-tracking of the state House's Medicaid expansion bill was completed Thursday with a 92-22 vote on third reading of House Bill 76.

"This is probably the most important legislation that this General Assembly can take up in this session," said Rep. Donny Lambeth, R-Forsyth, during Wednesday's floor debate.

Lambeth is a former N.C. Baptist Hospital president who has been the primary House proponent for Medicaid expansion bills for several years.

"We're going to have a lot of important legislation to debate in this session, but this is a one-time opportunity to take advantage of an economic windfall for North Carolina," Lambeth said.

HB76 will be sent to the Senate, where it likely will be put on hold for at least the short term.

Senate Republican leadership is preparing to file expansion legislation that likely will feature several health-care reform measures not supported in the House.

Although Senate leader Phil Berger, R-Rockingham, has become an expansion advocate after years of stiff opposition, he had said those reforms are necessary to gain his support and enough Republican senators to pass any expansion legislation.

During the 2022 session, each chamber passed an expansion bill in May, but could not negotiate a compromise during the remainder of the session.

HB76 is tied directly to the 2023-24 state budget. If the state budget is not signed into law by Dec. 31, the legislation in HB76 would expire at that time.

Background

North Carolina is one of 11 states, mostly in the Southeast with Republican-controlled legislatures, that have not passed a form of Medicaid expansion.

Multiple independent studies have determined that between 450,000 and 650,000 North Carolinians could qualify for expanded Medicaid coverage.

Those who might be eligible under an expanded program are those between the ages of 18 and 64 who earn too much to qualify for Medicaid coverage, but not enough to purchase coverage on the private insurance marketplace.

House speaker Tim Moore, R-Cleveland, took an optimistic approach to the passage of HB76 and its potential fate in the Senate.

"We have a unique opportunity to expand coverage with federal funds already on the table," Moore said.

"The stakes are high and the cost to the state is minimal. Finally, hundreds of thousands of North Carolinians who have been getting by without health care coverage will have the peace of mind that an injury or illness will not cost them their livelihood.

"This legislation also addresses the pressing mental health and behavioral health concerns in our state, using federal dollars already allocated for this purpose," Moore said.

The statewide Care4Carolina coalition praised the passage of HB76.

Abby Emanuelson, executive director of the 166-member coalition described HB76 as "a straightforward North Carolina solution to expand Medicaid and close our state's health care coverage gap."

"The House's action is a major step toward helping hundreds of thousands of North Carolinians who are currently in the gap, including working parents, small businesses across the state and 14,000 of our veterans.

"Closing the coverage gap by expanding Medicaid will improve the health of our people, our economy and our entire health care system."

Work requirement

The House passed HB76 by a 96-23 vote on second reading Wednesday following the approval of three amendments submitted on the floor.

One amendment has some beneficiaries facing a controversial work requirement to be eligible.

What the requirement would be has not been clearly defined by Republican legislators who support the language. It could include a job-training or community service component as well.

The amendment submitted Wednesday by Rep. Keith Kidwell, R-Beaufort, works as a contingency for if the federal Centers for Disease Control and Prevention were to receive approval to allow for a work requirement.

In that event, the state Department of Health and Human Services would be required to "enter into negotiations with CMS to develop a plan for those work requirements and to obtain approval of that plan."

Lambeth supported the amendment, but Kidwell still voted against HB76 in second and third reading.

Lambeth cautioned that about 70% of potential beneficiaries already are working. Some of those work for employers who either don't or can't afford to offer employer-based health insurance benefits.

Lambeth expressed confidence that Medicaid expansion would play a role in employers being able to fill job vacancy once the eligibility gap was narrowed.

The second amendment adds $50 million from the N.C. Division of Health Benefits for fiscal 2023-24 to be used for the administrative costs of Medicaid eligibility determinations and for inmate medical costs.

Funds would be distributed to counties on a per capita basis with a $100,000 minimum.

The third amendment would establish a Rural Areas Forgivable Loan pilot program for medical students who agree to work full time as a doctor or nurse in rural communities.

Lambeth said the three amendments "were the result of concerns and feedback we received."

"For example, counties expressed concern that even though the bill covered their cost to enroll new beneficiaries, they needed more help. So we responded to their concerns.

"One member wanted some assurance that we would help in rural areas with their manpower issues. Of course, some want to push the work requirement.

"In combination, these amendments did help us gain more support."

What's at stake

Lambeth said without passage of HB76, up to 300,000 current Medicaid beneficiaries could lose COVID-19 pandemic-related coverage as soon as July 1.

Those North Carolinians qualified for temporary Medicaid coverage as part of the Families First Coronavirus Response Act that Congress passed in response to the start of the pandemic in mid-March 2020.

The bill's main focus is on the financial aspect of filling the coverage gap that represents "a combination of intergovernmental transfers, hospital assessments, gross premiums tax revenue and federal funds."

Hospital assessments have been a negotiating sticking point over the past nine years, even though the state's major health-care systems have agreed to the assessments with the expectation that the additional federal Medicaid administrative funding will more than offset the annual expense.

A pivotal turning point in Berger and Moore agreeing to consider Medicaid expansion was the potential for the federal pandemic relief law to provide North Carolina with $1.5 billion over two years to treat traditional Medicaid patients.

The proposed work requirement is controversial in part because it could disqualify the state from receiving certain federal COVID-19 relief funding if the expansion law allows stipulations on enrollees.

Legislative fiscal research analysis staff told legislators they did not believe North Carolina would be eligible for the relief money with the work requirement provision.

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