North Carolina Looks For Insurers As It Privatizes Medicaid

Aug 9, 2018

North Carolina is looking for insurance companies as it privatizes its Medicaid system. The program that covers 2.2 million poor and disabled North Carolinians is undergoing a massive overhaul, but patients won’t see any changes until next year.

North Carolina is the largest state that has not moved its Medicaid program to a privately-run system. In 2015, state lawmakers directed the health department to start transitioning the program. The process has now started with the state asking insurance companies to submit proposals to manage care. 

N.C. DHHS Secretary Mandy Cohen, M.D., speaks during a public input session on Medicaid reform.
Credit North Carolina Health and Human Services

North Carolina Secretary of Health and Human Services Mandy Cohen stressed that the services covered and the amount doctors are paid won’t change. The idea is to encourage people to get preventive care and keep on top of chronic health problems.

“To get the care that they need before something becomes a really major, very expensive problem,” said Cohen. “Control hypertension and high blood pressure before it turns into a stroke.”

In North Carolina, the first phase will impact about three quarters of the people enrolled. These beneficiaries will then choose their insurance company, likely starting in November 2019.

Those with more serious medical issues will stay on the state-run program until 2021.

The four statewide and handful of regional contracts represent a $6 billion a year spend for North Carolina. The request for proposal, or RFP, comes before federal approval needed to go ahead with this Medicaid re-design. 

“We have a very good line of sight into the final details so I feel very confident in putting out this RFP today," Cohen said, "However in our final negotiations things could change."

According to Medicaid Health Plans of America, an association of health plans, 41 states already use some form of this managed care system for parts of their Medicaid programs. 

The North Carolina Healthcare Association said in a statement: “In other states, we have seen that putting the responsibility for Medicaid managed care in the hands of insurance businesses has led to the unraveling of the healthcare safety net. We continue to believe that provider-led organizations are the best option for ensuring patient-centered reform and protecting healthcare access for all.”

Provider-led organizations are run by health systems, doctors groups or hospitals, as opposed to traditional insurance companies. 

Insurers must submit their proposals by October and the contracts will be awarded early next year.