Joint Committee on Healthcare Access
The Joint Legislative Committee on Access to Healthcare and Medicaid Expansion, established through SB 105: 2021 Appropriations Act, held its second meeting this week during which lawmakers heard a handful of presentations and pitches about why this year is a good time for the state to expand Medicaid. The committee is tasked with studying various ways to improve access to health care and health insurance for North Carolinians, including, but not limited to, expanding Medicaid.
Hugh Tilson, Director of the North Carolina Area Health Education Centers (NC AHEC) Program, started off the meeting Tuesday morning with a presentation to lawmakers largely focusing on the health workforce challenges facing North Carolina. Many of the issues surrounding the health workforce in the state, and throughout the country, are not new issues, but have only been exacerbated by the COVID-19 pandemic. NC AHEC provided a handful of recommendations to the committee, including creating a long-term workforce plan to combat current workforce shortages, strengthening capacity for telehealth services system-wide, and integrate behavioral health services into primary care.
Lawmakers also heard one of the most promising pitches yet as to why North Carolina should expand Medicaid by Dave Richard, Deputy Secretary for NC Medicaid, and it’s largely because of the increase in federal incentives to do so. Richard focused his presentation to the committee on the financing of expansion. Medicaid is funded by both the federal government and states and, historically, in North Carolina, 67% of Medicaid expenditures have been covered by the federal government while the 32.35% non-federal share has been covered by state appropriations, hospital assessments, intergovernmental transfers, and certified public expenditures. During the COVID-19 federal public health emergency, North Carolina has been receiving an enhanced federal match of 73%. In states that have chosen to expand Medicaid, the federal match is increased to 90%. Richard emphasized to lawmakers that it would require an act of Congress to change the law and reduce that 90% match level.
Medicaid expansion would provide coverage to low-income parents with an annual income between $8,004 and $30,305 for a family of 3, and low-income, single, childless adults who earn less than $17,774 per year. This would add 500,000-600,000 additional North Carolinians to the Medicaid program.
Richard touted expansion as a way to boost employment among those in the health care industry since 90% of North Carolina family physicians participate in the NC Medicaid program in addition to being a way to provide healthcare coverage to those in some of the most rural parts of the state and reducing the over $1.8 billion in uncompensated care provided by hospitals in 2019.
Opponents of expansion have often argued that if the state were to expand Medicaid, it would take a significant proportion of the state’s overall budget to cover the state’s share of the cost, meaning there would be less money for the state to spend on other needs and programs. Richard addressed those concerns, again, pointing to the indefinite 90% federal match in federal law and offering a number of different ways that North Carolina would be able to cover the 10% non-federal share, including PHP premium tax collections, hospital assessments, and receipts from a new Medicaid coverage gap assessment that would be applicable to the state’s hospitals. In addition, the American Rescue Plan Act includes a provision that offers a 5% incentive to new expansion states. For North Carolina, that would mean an additional $1.6 - $1.7 billion in federal receipts over two years.
Lawmakers were encouraged by the financial picture painted by Richard, however, they were still concerned about the workforce capacity to handle the addition of more than 500,000 new Medicaid enrollees.
A presentation from Peter Daniel, Executive Director of NC Association of Health Plans, later in the meeting provided legislators with some encouragement. Daniel spoke to the committee about North Carolina’s Medicaid transformation initiative which started back in 2015. Medicaid managed care officially went live July 1, 2021 with five prepaid health plans that contract directly with physicians, hospital systems, and other providers to build networks that offer all mandatory Medicaid services as well as customized value-added benefits and in-lieu of services. Several lawmakers praised Daniel and the health plans for the smooth statewide rollout of managed care last year. When asked by lawmakers about whether the health plans have the infrastructure in place to handle the additional 500,000-600,000 North Carolinians who could be added to the Medicaid rolls should the state choose to move forward with expansion, Daniel told committee members that the plans would be ready and already have the capacity to take on those additional enrollees should that ultimately be the decision made by the General Assembly.
