North Carolina is about to become the latest state to expand Medicaid eligibility under the Affordable Care Act through a deal that legislative leaders announced Thursday.
Tar Heel State’s hospital industry supports the expansion, which would provide approximately 600,000 adults with incomes below 133 percent of the federal poverty level, or $19,391 a year for one person. The federal government provides 90% of the funding for these Medicaid expansion activities, and the states are responsible for the rest. The deal announced Thursday includes a review of the hospitals that will fund North Carolina’s portion. The measure would also relax state certification of demand laws, allowing service providers to expand services.
Providers and industry groups in North Carolina, along with low-income residents, have been waiting more than a decade for the Medicaid expansion to come to fruition. North Carolina is one of 11 states that have not yet expanded Medicaid under the 2010 health care law. South Dakota was the most recent state to adopt the policy when voters approved it at the ballot box in November.
North Carolina House Speaker Tim Moore (right) and Pro Tempore Senate President Phil Berger (right) announced the agreement to push for Medicaid expansion, something Governor Roy Cooper (D) has long advocated for, at a press conference on Thursday. Both chambers passed Medicaid expansion bills last year but failed to reconcile their differences before the legislative session ended in July.
“What a big announcement for North Carolina. It’s a huge policy direction that will help a lot of people in this state, but it’s going to do it in a financially responsible way,” Moore said.
The state House of Representatives quickly and overwhelmingly passed Medicaid expansion legislation last month, shortly after the new session began. The state senate will adapt the certificate of need provisions from its previous measure into the new one. That issue was the main reason the North Carolina General Assembly was unable to move forward with an expansion last year, Mr. Moore said, but the two chambers are working together to resolve their disagreements.
Support from General Assembly leaders, along with Democrats of the legislature and some Republicans of the legislature, all but assurances that the Medicaid expansion bill will reach Cooper’s desk. The state senate will act first, followed by the lower house.
“An agreement by legislative leaders to expand Medicaid in North Carolina is a huge step forward that will save many lives, and I commend the hard work,” Cooper said in a press release on Thursday. towels brought us here. “Since we all agree this is the right thing to do, we should put it into effect now to ensure that we capitalize on the money that will save our rural hospitals. and investing in mental health. I look forward to reviewing the details of the bill.”
Medicaid expansion has enjoyed some degree of bipartisan support in North Carolina for years, but some lawmakers still oppose it, mainly for financial reasons. Despite conflicting evidence from other states, skeptics fear that costs will increase over time. Moore addressed those concerns directly on Thursday by asserting that the Medicaid expansion would, at worst, have a neutral impact on the state’s budget.
North Carolina Secretary of Health and Human Services Kody Kinsley said ahead of Moore and Berger’s announcement that time is of the essence. Among those who will benefit are North Carolinians whose Medicaid benefits are at risk as the state will soon resume eligibility determinations that were halted during the COVID public health emergency. -19 federal government, which expires May 11.
Starting April 1, an estimated 300,000 North Carolinians will lose Medicaid coverage or experience reduced benefits, according to the state’s Department of Health and Human Services.
However, for some providers, the Medicaid expansion may come too late. For example, in January, Greenville-based ECU Health announced plans to close five rural health clinics in the eastern region of the state.
“At a time when we need access to care more than ever in these areas of our state, especially when I think about mental health and the importance of care. They close because like any other business when three to four out of 10 people walk through your front door there’s no way to pay, you can’t keep it open,” Kinsley said.
The North Carolina Healthcare Association, which represents hospitals, endorsed the Moore-Berger agreement on Thursday. “This legislation will have a major impact on enhancing the health of the people of our state and helping to maintain access to health care, particularly in the areas of health care,” said CEO Steve. We look forward to working with elected officials to support the early passage of this historic law.” Lawler said in a press release.
Stop the wave of hospital closures
As in other states, concerns about financially struggling hospitals closing have outweighed financial and ideological opposition to Medicaid expansion by a significant number of people. Republican lawmakers.
Six hospitals in rural North Carolina have closed since other states began rolling out Medicaid expansions in 2014, according to data from the Cecil G. Sheps Health Services Research Center at the University of North Carolina. at Chapel Hill. UNC data shows North Carolina ranks fifth nationally in the number of rural hospital closures since the expansion took effect elsewhere.
Financial factors play a major role in causing rural hospitals to close or cut services, said George Pink, senior research fellow at the Sheps Center. Expanding Medicaid could ease providers’ burden of uncompensated care, he said, which in turn could increase cash flow for hospitals with a higher proportion of Medicaid patients.
“More than half of our hospitals have negative operating margins, and the average operating margin for our hospitals is close to negative 3.7%,” said Lawler. Smaller community hospitals include mostly people who are struggling, he said.
This goes a long way to explaining why the North Carolina hospital industry supports Medicaid expansion and is willing to cover the state’s costs. According to a 2019 report from the Kaiser Family Foundation, most states that expand Medicaid fund the program through mutual funds, but 11 states have previously assessed or increased taxes on providers. to cover costs. The North Carolina Healthcare Association projects that hospitals will pay $550 million a year to fund Medicaid expansion.
Hospitals are betting that more patients with health insurance and fewer unpaid bills will offset the new taxes they will owe. Creating more money will help state hospitals, especially those in rural communities, which are prone to closures, Lawler said in an interview ahead of Moore and Berger’s press conference. . “We believe the additional financial support that rural hospitals receive because these people now have insurance makes it at least breakeven, if not financially uplifting,” he said.
According to a 2021 study by the Urban Institute published in the journal Health Affairs, hospitals in Medicaid expansion states saved an average of $6.4 million annually on no-charge care. since states expanded eligibility, and hospitals in the safety net have benefited the most.
A key component of North Carolina’s Medicaid expansion plan is the federal Health Care Access and Stabilization Program, known as HASP, which provides enhanced Medicaid reimbursements to hospitals in need financial difficulties. Countries must choose to participate in the program.
Together, Medicaid and HASP expansion will bring in $8 billion per year, Kinsley said. And the federal government is providing additional funding to states making up to $1.8 billion in two-year expansions to North Carolina, Kinsley said.
Suppliers expect benefits
More revenue could also help hospitals and other providers expand services, including maternity and oncology care.
If Medicaid is expanded, Four Oaks-based CommWell Health will invest in expanding its services, hiring primary care providers, and expanding care coordination to address critical factors. Social determinants of health, Christopher Vann, director of development for the community health center, said before announcing the deal.
Dr Lynne Fiscus, president and CEO of the Chapel Hill-based UNC Physicians Network, said more patients seeking preventive care could reduce future spending. “We will be able to treat more diseases earlier and treat more people, identifying and treating chronic conditions before they reach a stage where they need urgent care or hospitalization,” she said.
Additionally, removing financial pressure on healthcare organizations allows community clinics and hospitals to collaborate more, said Adam Searing, associate professor in the School’s Center for Children and Families. Public Policy McCourt of Georgetown University, said ahead of Moore and Berger’s press conference.
