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Cooper administration delivers NC Medicaid expansion pitch

North Carolina Gov. Roy Cooper's administration made perhaps its most promising pitch yet to legislators on Tuesday to expand Medicaid, with a key health regulator calling it more advantageous than ever to cover hundreds of thousands of additional low-income adults.

dave richard ncdhhs.jpg
NCDHHS
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Dave Richard

Addressing a House-Senate committee created specifically to study expansion, state Medicaid director Dave Richard said a surge in traditional Medicaid enrollment during the coronavirus pandemic and a fiscal sweetener from Washington make taking the step even more appealing.

“We come to you and say that we think Medicaid expansion is a really good deal for North Carolina and that it’s a good deal for a lot of reasons,” Richard told lawmakers. “It just makes great sense to improve the health of North Carolina citizens.”

The study committee, which began meeting last month, formed as a result of budget negotiations last fall between Republican legislative leaders and the Democratic governor, a longtime expansion advocate. North Carolina is among a dozen states that haven’t expanded Medicaid under the 2010 federal health care law.

The GOP-controlled legislature would have to formally vote to permit expansion. Senate leader Phil Berger, who for years opposed expansion, is now open to it. Many House Republicans remain skeptical and would have to be persuaded that covering an even-larger percentage of state residents with government health care is wise. GOP Rep. Donny Lambeth, a committee co-chairman, has said a package of health care access initiatives from the committee could come up for a General Assembly vote in September or October.

Other speakers Tuesday made presentations that linked expansion to increased health care industry employment and patient diagnoses and treatment, as well as improved rural communities, where uninsured rates are high.

Reducing “the coverage gap will improve the quality of life of rural North Carolinians in the communities that they call home,” said Patrick Woodie, president of the North Carolina Rural Center.

About 2.7 million North Carolina residents are now enrolled in Medicaid, the health care program for poor children and their parents and elderly low-income residents. That number has grown by over 500,000 alone since the pandemic began, in part because recipients who would be removed over time have remained on the rolls because of the COVID-19 emergency, according to Richard's presentation.

Berger
North Carolina General Assembly
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Phil Berger

Expansion would cover working adults and others who otherwise would make too much to qualify for traditional Medicaid. While expansion would likely benefit 600,000 residents in its first two years, about 200,000 people currently on Medicaid during the health emergency could qualify under an expansion, Richard said. Expanding soon would reduce paperwork needed to keep them on Medicaid, he said.

Currently, the federal government pays 73% of the state's Medicaid costs, with the remainder coming from state tax revenues, monetary assessments on hospitals and other funds. Under the expansion plan, the federal government pays 90%.

The 2021 federal COVID-19 relief law would give North Carolina and other nonexpansion states more money to cover traditional Medicaid patients for two years if they accept expansion. Richard said that would provide $1.5 billion in additional revenues for the state.

An analyst in the General Assembly's nonpartisan staff estimated Medicaid expansion would provide a fiscal net positive in the those two years. In the years following, the state would have to locate an additional $500 million to $600 million annually to pay its share, analyst Mark Collins wrote.

Cooper has proposed a plan in which the share would be paid through an existing tax on private Medicaid plans and additional assessments on hospitals. Hospitals benefit from treating Medicaid patients who, without expansion, would be considered charity-care cases.

“This is a program that is financially self-sustaining,” Richard said.

Questions and comments on expansion from Republican committee members focused largely on doctor and nursing shortages the state is facing.

Members from both parties were encouraged about a report on the transition of 1.7 million Medicaid recipients to five managed care plans last summer. Peter Daniel with the North Carolina Association of Health Plans said the five are well-prepared to accept more enrollees should legislators agree to expansion.

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