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N.C. Senate leaders announce support for Medicaid expansion

State Sen. Ralph Hise speaks about a broad health care bill that would expand Medicaid to 600,000 North Carolinians and reduce some health care regulations.

By Donna King, Carolina Journal, Published: May 26, 2022

In an about-face on an issue that has caused conflict with Democratic Gov. Roy Cooper, Republican leaders in the state Senate announced a health care proposal on Wednesday that includes Medicaid expansion under the federal entitlement program, the Affordable Care Act.

House Bill 149 contains work requirements for Medicaid expansion enrollees and measures the senators say would cut regulations on the health care industry that limit the number of providers and facilities. State Medicaid expansion could put more than 600,000 able-bodied, working-age adults onto the taxpayer-funded health care program.
“If, as a result of giving half-a-million people that card, you end up creating longer lines for folks who already have insurance coverage, we really haven’t helped in terms of access,” said Senate leader Phil Berger, R-Rockingham, in a press conference at the state Legislative Building in Raleigh. “It is our belief that partnering the increased coverage with measures designed to increase the number of providers and the number of facilities people can go to is the right balance to achieve an overall improvement in access and quality.”

Waivers to allow states to put work/volunteer requirements or a small co-pay into expansion plans were a carrot put in by the Obama administration to encourage states to expand the program. Under the Trump administration, states that expanded Medicaid had the waivers approved, but the Biden administration has put a hard stop to them.
“The bill as drafted has a work requirement. That is what we would like to see,” Berger said. “We will get it passed, and then we will deal with how to convince the Biden administration and the courts.”
According to the bill language, the new enrollees would continue to be eligible for Medicaid, even while the work requirement was being litigated.
“Republicans have done a complete about-face, and it’s a massive risk to take the work requirements to court,” said Donald Bryson, president of the John Locke Foundation, a free-market organization that oversees the Carolina Journal. “If they lose, then it’s just Medicaid expansion as Obama wanted it.”
In Wednesday’s press conference, Berger was joined by members of the Joint Legislative Oversight Committee on Medicaid and N.C. Health Choice, which studied the idea of expansion and heard testimony over six meetings.
Part of the deal to get Gov. Roy Cooper’s signature on the latest state budget was for the legislature to study expansion. The committee’s recommendations have not been released, but Berger says they are likely to resemble this bill.
Long opposed by Republican lawmakers and state economists, Medicaid expansion has held up nearly every state budget since Cooper has been in office, as he vetoed any that did not fund it. State Republican leadership filed a bill in 2019 that would have instituted work or volunteer requirements into any expansion plan. They now say that COVID changed the calculus, because so many people were added to Medicaid with federal rescue plan money, and hospitals took on a lot of extra expense.
“The environment has clearly changed in North Carolina,” said Ralph Hise, R-Mitchell. “As we continue through this pandemic, we have reached a situation where the federal government has prohibited removing anyone from the Medicaid rolls, and we are estimating that around 300,000 ineligible people are on the Medicaid rolls in North Carolina, and would have to be removed within a year.”
The federal government would cover 90% of the bill for Medicaid expansion, with the 10% fiscal gap paid covered by an assessment levied on hospitals, which will in turn draw that money from the federal government. The offer lawmakers would not refuse was a sweetener put on the table by the Biden administration. In expanding the program, 10% of the expansion cost falls to the state, which means North Carolina could face a funding gap between $119 million and $171 milliom . The Biden administration is offering one-time American Rescue Plan money to the 12 states that have not expanded Medicaid; for North Carolina that would mean $1.2 billion.

While the bill increases the demand side of the health care equation, lawmakers say they are including some cleanup measures in regulations on the supply side. Among those issues, 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.”
“It’s absolutely crucial that the General Assembly work to increase health care supply in our state,” said Jordan Roberts, director of government affairs for the John Locke Foundation. “Across North Carolina, numerous counties suffer from a lack of critical care. In many cases, restrictive state laws cause this shortage. Health care demand is there; we need to ensure our state can serve all the patients in 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.
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.
Sen. Joyce Krawiec, R Forsyth, has been working to stop surprise billing in health care and found a spot for it in this bill. She also co-chaired the Medicaid and health choice committee, working with hospitals who wanted expansion and coverage for telehealth, among other items.
“I think the bill is a rescue plan for our hospitals, especially our rural hospitals who have had some tough times this last couple of years through the pandemic,” she said.

If the bill passes out of the Senate as Berger expects, there will likely be a full-court press on House members from the Senate and the governor’s office to agree. So far, Speaker Tim Moore has said that there is little appetite for Medicaid expansion in the House.
“I would like to see us pass it in the Senate and get it over to the House and continue the process of educating our colleagues on why we have changed our mind,” said Berger.

Berger told reporters Wednesday that he would welcome the opportunity to explain why he changed his mind on Medicaid expansion.
“I still believe that there are better ways to address some of these issues, but reality has to play a part in the solutions that we offer,” said Berger. “We are talking about helping people and ensuring that when the Biden recession hits us, the state’s budget will be in good shape.”