North Carolina Senate passes ‘monumental’ Medicaid expansion

The effort to expand Medicaid in North Carolina passed a hurdle Wednesday afternoon as the N.C. Senate voted 44 to 2 to pass H.B. 149 Expanding Access to Healthcare.

In addition to Medicaid expansion, the bill contains the repeal of some certificate-of-need (or CON) laws and expands practice authority for nurses.

"What we are going to do is monumental," said Sen. Mike Woodard, D-Durham. Sen. Ralph Hise, R-Mitchell, addressed the question of "why now?" for the passage of this bill by saying it comes down to inflation and access. "Inflation has been a gut punch to all North Carolinians this year," he said. "Everything is going up . But with the sector of cost rising faster than anything else, and that has been true for decades, is healthcare; and it's not even close."

He cited a WalletHub healthcare study from last year that ranked North Carolina 49 out of 51 states for healthcare costs. He said the same study ranked the state 43 out of 51 for access to healthcare, which includes access to insurance and to healthcare providers and facilities.

The reason for the about-face for Senate Republicans, according to Hise, has been due to eight years of solid Medicaid budgets. Hise credits the budgets to Republican leadership in the General Assembly and reform of the system with the Medicaid transformation last year. These successes, he said, lead to a solid footing for Medicaid in the state.

Sen. Kevin Corbin, R-Macon, said as the owner of two insurance agencies that deal with health insurance, he sees situations firsthand on how Medicaid expansion would help some in the state. An example he used is a single mom with two children who can't afford healthcare because her income is too high to qualify for Medicaid but too low for a tax credit from the Affordable Care Act.

Senate Leader Phil Berger, R-Rockingham, concurred with Hise and Corbin, saying the three reasons he was initially against expanding Medicaid no longer hold. Berger said his view of incentives for the people who would be receiving Medicaid may not have been wrong, but he may not have had the right focus.

He cited Corbin's example to make his point. Berger did, however, mention there may be some people who don't work and get coverage, but most would fall into the first category Berger said he used to be concerned about the fiscal risk to the state budget, but the bill has two "offramps" for the state. If the federal government ever changes the 90/10 split, he said North Carolina is out.

The federal government would cover 90 percent of the bill for Medicaid expansion, with the 10 percent fiscal gap covered by an assessment levied on hospitals, which will in turn draw that money from the federal government. The offer lawmakers could not refuse was a sweetener put on the table by the Biden administration. In expanding the program, 10 percent of the expansion cost falls to the state, which means North Carolina could face a funding gap between $119 million and $171 million. "The state taxpayers who pays state taxes are not going to be burdened as a result of this bill," Berger stated. "The fiscal risk to the state of North Carolina is non-existent as far as our state budget is concerned. In fact, with the recession that is coming, doing this will help provide some buffers for our state budget that would otherwise would not be available to us."

He said the state's Medicaid system was broken 12 years ago, so much so that they had to appropriate money for it as they didn't know how much it would cost, and adding more people to the system at the time would have been wrong. But, with the transformation to Medicaid Managed Care last year, he feels comfortable adding the expansion population to the system.

The John Locke Foundation is standing against the N.C. Senate's vote Wednesday to expand Medicaid.

"For years, most state senators have rightfully recognized that Medicaid expansion is bad medicine for North Carolina," said Locke Chief Executive Officer Amy O. Cooke. "Their changed view is disappointing."

"Data show that the D.C.-controlled health insurance scheme will leave North Carolinians with less health care access and higher tax burdens because it's paid for through D.C. deficit spending, adding to inflationary pressures and driving costs even higher," Cooke added.

"The Senate's Medicaid expansion bill includes some positive supply-side reforms, such as scaling back certificate-of-need restrictions and granting nurses full practice authority," Cooke said. "We should exhaust those avenues before ceding control of North Carolinians' health care to Washington, D.C."

Locke President Donald Bryson urged state senators and their N.C. House counterparts to consider the state's recent history with Medicaid.

"It wasn't that long ago that Medicaid's massive, unpredictable cost overruns tied legislators' hands during annual state budget planning," Bryson said. "Good fiscal stewardship brought that problem under control. But the threat of Medicaid dictating the state's budget choices looms again in the future.

"Larger-than-expected Medicaid enrollment spikes in other states, combined with today's economic uncertainty, mean lawmakers could be setting themselves up for another long-term fiscal headache," Bryson added.

Brian Balfour, Locke's senior vice president of research, offered multiple reasons for lawmakers to reject Medicaid expansion today.

"Expansion would make hundreds of thousands of additional North Carolinians dependent on government for their health care," Balfour said. "Increased government dependency is decidedly not a conservative value.

"Increased health insurance coverage will not mean increased access to care," he added. "Plus, healthier people joining the Medicaid program almost certainly will crowd out services for more needy populations."

Senate leadership held a press conference last week, along with the Joint Legislative Oversight Committee on Medicaid and NC Health Choice to announce the healthcare proposal, including Medicaid expansion, which could put more than 600, 000 able-bodied, working-age adults onto the taxpayer-funded healthcare program.

Also included in the bill is the partial repeal of certificate-of-need laws. This bill repeals CON for some areas of health care, but not all, and reduces the number of medical specialties for which the N.C. Department of Health and Human Services is allowed to dictate "market need."

The bill also contains the SAVE Act, which allows nurses to practice at the top of their training without a doctor present. It's a measure that doctors' groups have opposed but is targeted to rural areas where staffing shortages have reduced access to health care. "North Carolina ranks third in the nation for hospital closures," said Sen. Lisa Barnes, R-Nash. "Something I am not proud of."

She cited the closure of a hospital in Franklin County when she was in the House and how it took three years to reopen it. She said it is difficult to overcome the loss of hospitals in rural areas.

The bill further directs insurance companies to cover telehealth services and requires some medical billing transparency. Patients would have to be notified 72 hours ahead of a procedure or visit if they may have an out-of-network provider.

While Berger says passage of the bill is "the right thing to do," he may have his work cut out for him to convince those in the House of that notion.

"Quite frankly, our work has just begun," said Berger. "For this to become law, there are 120 people on the other side of this building that we've got to start working on. I am going to do my part of that, and I ask that all of you do that as well."

So far, Speaker Tim Moore has said that there is little appetite for Medicaid expansion in the House.