Senate leaders explain shift on Medicaid Support for offering Medicaid to more North Carolinians is a shift in GOP thinking. Here's how N.C. Senators explain it.

Senate Republican leaders said Wednesday they have embraced "a new reality" about Medicaid expansion in introducing a multilayered health care reform bill.

Their support, however, hinges on a give-and-take legislative proposal - that Democratic Gov. Roy Cooper and Democratic leaders are willing to accept several long-term GOP health care reform plans in order to expand Medicaid coverage.

Those include a controversial work requirement for new recipients and easing restrictions that could allow more health care providers, including for-profits, to enter the state's marketplace.

Senate leader Phil Berger, R-Rockingham, and Sen. Joyce Krawiec, R-Forsyth, acknowledged in a press conference they have been among the legislature's top critics of Medicaid expansion since it became a possibility in 2010 under the federal Affordable Care Act, also known as Obamacare.

"If there's a person in the state of North Carolina who has spoken out against Medicaid expansion more than I have, I'd like to meet that person," Berger said. "In fact, I would like to talk to that person about why my view on this has changed because this is the right thing to do."

Krawiec opened her comments by saying "meet the second person who has talked more about not expanding Medicaid in North Carolina, next to (Berger)."

Cooper's office said the progress on Medicaid expansion is encouraging and that the governor "will carefully review this legislation."

The revamped House Bill 149 passed the N.C House as a bill to improve access to telehealth but was revised in the state Senate to include the Medicaid expansion provisions.

In formally introducing the proposed bill, Berger asked "Why now, why this?"

Senate GOP leaders say their opposition has thawed in part because of the federal government's track record - during the Obama, Trump and Biden administrations - on paying 90% of what it costs to expand Medicaid in the 38 states that allowed more people to be covered.

"I had concerns the federal government would break its promise ... leaving states, such as North Carolina, holding the bag with bigger and bigger health care expenses and holes in our budget," Berger said.

Berger said recent Medicaid reform legislation, highlighted by the managed care transition that began in July, has made the state's system "capable of handling the additional (450,000 to 650,000) people who will be covered without creating problems for the state budget."

"It was a broken program that was mismanaged and burdened taxpayers with billion-dollar shortfalls on a regular basis," Berger said.

"Fortunately, over the past decade, Republican leadership in the General Assembly has turned Medicaid around in N.C. with eight straight years of solid Medicaid budgets without cost overruns."

Obamacare not going away

"The Affordable Care Act," Berger said, "is not going to go away."

"At this point in time, all legal and legislative attempts to overturn that act have not succeeded, and I do not think they will succeed in the future. It's highly unlikely that the 90% cost share will change."

Although the proposed bill would allow the state's health secretary to end North Carolina's expansion efforts if the federal government stops covering 90% of the costs, Krawiec said, "We don't believe that will happen."

Medicaid expansion opponents have downplayed an annual $758 million that the state's hospitals and health-care systems have agreed to provide to help cover the state's 10% share.

Another enticement for Senate Republicans: the 2021 federal COVID-19 relief law would give North Carolina $1.5 billion over two years to treat traditional Medicaid patients if it accepts expansion.

"Medicaid expansion has now evolved to the point that it is good state fiscal policy and helps us address the mental health crisis we're facing," Berger said.

Krawiec said there is "a fear that the federal government will force us at some point to expand Medicaid" since there are just 12 non-expansion states.

"We're not likely to get a better deal (from the federal government) than is being offered now," Krawiec said.

Krawiec said HB149 "is a rescue plan for our hospitals, especially our rural hospitals, all of whom have had rough times through the pandemic."

"Hospitals have wanted to expand Medicaid to cover more people, and this bill does that, along with expanding telehealth," she said.

GOP bill priorities

Berger emphasized that Senate GOP leaders believe Medicaid expansion "needs to happen with additional reforms, including the very real supply-side issues that prevent North Carolinians from accessing care."

Perhaps foremost is easing some restrictions on certificates of need, which health care providers must obtain from the state before building new health care centers or adding certain equipment.

Easing that restriction could allow for more competition, including from for-profit groups, for medical procedures.

The state's not-for-profit health care systems have opposed weakening certificate-of-need laws out of concern that large for-profit groups would enter North Carolina and cherry-pick the more lucrative services, leaving the not-for-profits treating the sickest patients, likely without health insurance, who come into emergency departments.

Other key elements of the proposed Medicaid expansion: permitting nurse practitioners, certified nurse midwives and nurses with other advanced specialties to practice without a physician's formal supervision; requiring health insurers in the state to cover telehealth services; and requiring in-network health facilities to alert consumers when out-of-network providers are scheduled to provide care.

Krawiec said the proposed bill "pairs with many other policy changes that will improve access to care," emphasizing reforming the certificate-of-need laws "that I have been working on since I got here."

Berger said that "we must do something to improve health care, especially expand access and control costs. We need coverage in North Carolina for the working poor."

House opposition

Berger acknowledged that state House Republican opposition to expansion remains a major obstacle.

He said the Senate's goal is to clear the bill and then give the House and Speaker Tim Moore, R-Cleveland, the time they need for review, which could carry the legislation into the 2023 for lengthy discussion in that chamber.

"We want to be able to educate the House on why everyone standing here has changed their minds," Berger said.

A joint oversight legislative committee has been addressing Medicaid expansion, along with other potential health care reform considerations, at several pre-2022 legislative session meetings as part of a budget compromise reached between Cooper and Republican legislative leaders.

The committee's goal is to make recommendations in the fall. The committee has Krawiec and Rep. Donny Lambeth, R-Forsyth, among its co-chairs.

Berger and Krawiec said that, while the committee has produced great discussions on health care reform, including Medicaid expansion, Senate leaders felt the timing was right now to move the reform proposal.

Lambeth said Monday that "the committee has not finished their work and has made no recommendation."

"The House continues to look at best options for North Carolina," he said. "It has work to do and no plans to take up expansion in the short session" that is projected to end in early July.

Berger said that a potential fall committee recommendation timetable was another reason to move forward with now "since I fully expect the recommendation to be identical, if not very similar, to (HB149)."

"If we don't get the bill passed in the short session, it gives the committee something to chew on," he said.

Medicaid in N.C.

Medicaid currently covers 2.71 million North Carolinians, which increased by nearly 27% - 588,611 people - since the pandemic surfaced, according to the N.C. Department of Health and Human Services.

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

It is likely, the Associated Press reported, that many of those new enrollees could remain on Medicaid post-pandemic if the proposed expansion bill becomes law.

Sen. Ralph Hise, R-McDowell, another previously fierce opponent of Medicaid expansion, said he was struck by the reality that most of the proposed new enrollees already are being served. He also has been a long-time supporter of certificate-of-need reform that would be accomplished in HB149.

The work requirement for new Medicaid recipients has received grudging support from some Democratic legislators.

Work requirements in other states have proven problematic, however.

A work requirement passed by the Arkansas and New Hampshire legislatures has been struck down by federal courts. In March 2021, the U.S. Supreme Court said it would not hear additional arguments on the appeals made by the two states.

Berger said the plan is to pass the bill with the work requirement included, "and then we'll deal with whether or not we can convince the Biden administration or the courts that this is the right thing to do."

Berger said that, while the work requirement is being litigated, enrollees would remain eligible and not be denied.

The shift on Medicaid expansion by Senate Republican leadership "does not come completely out of the blue, but it is still a remarkable shift from where leadership stood on the issue for much of the last decade," said John Dinan, a political science professor at Wake Forest University and a national expert on state legislatures.

"This is a remarkable change on the part of senate Republican leadership - to now be making a strong case for Medicaid expansion, at least as long as expansion is coupled with various other conservative health-policy priorities."

Mark Hall, a public-health and law professor at Wake Forest, said HB149 "is an encouraging sign that the task force process is generating constructive movement on several fronts."

But, he said, a bill this complex isn't likely to be enacted quickly.

"The tricky part will be what happens if there is significant opposition to one or more of those pieces. Will the rest of the bill survive or will it be politically feasible to spit off individual parts into separate bills?" Hall asked.

"The only way to find out is to start the serious legislative deliberations. Introduction of this bill will accomplish at least that much."

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