North Carolina faces April 1 deadline to either expand Medicaid or let coverage for 300,000 people expire

RALEIGH, N.C. (WGHP) – While legislators in North Carolina go through formal approval of Medicaid expansion – which could head to Gov. Roy Cooper's desk by the end of this week – and then negotiate a budget that includes that plan, a deadline is looming that could boot many who qualify for Medicaid out of coverage.

Employees of the North Carolina Department of Health and Human Services will begin on April 1 a recertification of benefits that could lead – and emphasis on "could" – to 300,000 people being removed from medical coverage because a national law covering them expires.

These are people who were receiving coverage through the first Coronavirus Response Act under a stipulation that states keep all Medicaid-eligible residents covered, regardless of whether that state had expanded Medicaid under provisions of the Affordable Care Act.

North Carolina has remained one of the 11 states that have not expanded Medicaid, and the plan announced last week – and which is moving through the Senate and House as you read this – could alleviate this issue.

But then there is the timing. And that doesn't look useful for those who are stuck in limbo between the end of one program and the adoption of another.

The Senate as soon as today could take a final vote on the compromise House Bill 76 that was adjusted to include provisions negotiated between leaderships.

State. Rep. Lambeth (R-Winston-Salem), the author of that bill and the chief evangelist of the expansion project in the House, said last week that he is hopeful of the Senate's OK reaching the House floor for a conference vote on Wednesday. That's March 15 – the Ides of March, as it were – when the bill could get its OK to go to Gov. Cooper.

But Cooper – and some members – are not happy that the expansion portion of the compromise would not occur until the General Assembly approves its biennial budget, a process that barely is underway, is exceedingly complex and could stretch for the full duration of the long session. Cooper decried that entanglement even as he praised the next step.

That would take us well past April 1, when DHHS officials start their process of unwinding those 300,000 from Medicaid coverage, a factor that a recent national report suggests is problematic.

"Expanding Medicaid is even more critical now given the end of the COVID-19 Public Health Emergency next month," a report on healthcare coverage gaps among the working poor stated. "On April 1, 2023, states will resume reviewing all Medicaid enrollees' eligibility, also known as 'unwinding,' ending coverage for those found ineligible. Millions of eligible individuals and families, particularly people of color and children, are at risk of losing coverage during the unwinding process due to administrative hurdles they must overcome to maintain their coverage.

"According to Center on Budget and Policy Priorities, 'Leaders in these states should prioritize expanding Medicaid to protect people's coverage, and to take advantage of a well-timed boost in federal incentive funding available to states that newly expand.'"

Officials at the NC DHHS will begin Medicaid unwinding, which could result in coverage termination or a reduction in benefits, DHHS spokesperson Kelly Haight wrote in response to a query from WGHP. "Since March 2020, under the COVID-19 Public Health Emergency, states have been required to maintain enrollment of nearly all Medicaid beneficiaries and their level of coverage to ensure they continued to receive health care and services through Medicaid during the pandemic regardless of changes in eligibility status. This continuous coverage requirement will end March 31, 2023," Haight wrote.

"As recertifications take place over the next 12 months, up to 300,000 North Carolinians may lose full health care coverage or see a reduction in benefits. However, many of these beneficiaries would be eligible for health care coverage under Medicaid expansion."

Lambeth said he was aware of this process and the starting date for the recertification and that "funding would stop and either many of those covered citizens will lose coverage or need to be rolled over to expansion.

"We estimate that app [approximately] 200,000 to 250,000 people would be impacted. Either lose coverage or rolled into the expansion.

"We have been watching this for several months, as it was not clear when this group … could move off of Medicaid. But we need to redetermine their eligibility."

Amended version of House Bill 76 by Steven Doyle on Scribd

Haight said the process will take place over the next 12 months and estimated "up to 300,000 North Carolinians may lose full health care coverage or see a reduction in benefits. However, many of these beneficiaries would be eligible for health care coverage under Medicaid expansion."

A bigger problem

The report on coverage gaps, which was commissioned by two advocacy organizations, United for Respect and Community Catalyst, said the broader issue is that 2.2 million people fall into the gap of earning too much for Medicaid and too low to qualify for marketplace subsidies because they can't afford the private insurance provided by their employers.

Healthcare Coverage Gaps Among the Working Poor by Steven Doyle on Scribd

The report also showed that even those with private medical insurance have to pay a significant portion of their income to cover the cost. That includes either having a baby or paying the premiums, copays and other costs that reach the policy's maximum for out-of-pocket expenses.

In North Carolina, a person making $28,980 a year – which is 225% of the federal poverty line – who becomes pregnant would have to pay about $7,139 in fees and expenses to have that child, or about 24.6% of that annual income.

If you look at out-of-pocket maximums plus premiums, that same wage earner would pay about $7,819 in those costs, or 27% of annual income.

The report analyzed the costs involved for employees of Walmart and Amazon, because they are two of the nation's largest employers but whose wages also are about $15 an hour for many.

The analysis shows that a single adult with children who earns that salary could pay as much as 54.3% of the $31,200 in annual income toward premiums and the maximum out-of-pocket expenses. That number is even higher if the adult is a smoker. Even with two of those salaries – a typical family – the cost would require more than a third of the total gross income.

"A family of 4 with only 1 income earner, with no tobacco users, could spend between 34%-70% of the household income on health care on a company plan," the report said. "At that point, the ACA plans become the better option."

'Fast and efficiently'

Meanwhile, a report by NC DHHS says that "most Medicaid terminations or reductions could begin as early as July 1, 2023, although some could lose coverage as early as May 1, 2023.

"NC Medicaid has been working with county Departments of Social Services and other partners to reach as many of its 2.9 million beneficiaries as possible to explain what they can expect and their potential options to obtain health benefits.

"Beneficiaries will be notified by mail, email and other forms of communication during this recertification period. NC Medicaid will also hold webinars and post updates on social media, among other measures to increase awareness."

Said Lambeth: "So that is why it is important to move as fast and efficiently as we can to get a budget done and the money as a result of expansion included in the budget and allocated by June 30. Yes, these people will be covered in the future, and yes it was part of our need to move forward."