By Jaymie Baxley
Kody Kinsley, head of the N.C. Department of Health and Human Services, announced Monday that uncertainty over the state budget may push the launch of Medicaid expansion into next year.
The department had hoped that expansion, which is expected to provide health insurance to hundreds of thousands of low-income North Carolinians, would go live in October. That timeline was contingent on the General Assembly either approving a budget or voting to give DHHS the authority to move forward without a budget by Sept. 1 — this Friday.
“Unfortunately, as we’ve come into this final week of August, it’s become clear to us that we will not be able to have a budget passed in time and enacted. Nor will we have separate authority to move forward,” Kinsley said during a video conference with reporters. “This is a tragic loss of health insurance for nearly 300,000 people that would have coverage on day one, delaying something that we know they and their families need so badly.”
The delay will affect an additional 300,000 residents who would have been able to sign up for Medicaid shortly after the rollout, along with a significant number of existing enrollees who were recently deemed ineligible for coverage.
In March, when North Carolina became the 40th state to pass legislation expanding access to Medicaid, the law’s implementation was tied to the passage of a state budget. The requirement was widely seen as a minor formality at the time, with lawmakers promising to have a spending plan in place by the beginning of the state’s fiscal year at the start of July.
All spring, it appeared that legislators were on track to deliver a budget by the deadline. But once negotiators from the state Senate and House of Representatives sat down to hammer out the differences between the two chambers’ priorities, the process ground to a halt.
Sensing the impasse could drag on, DHHS put forth a plan on July 26 to “decouple” expansion from the budget. But the proposal, which would have allowed the department to circumvent the political stalemate and begin working to officially launch expansion on Oct. 1, failed to receive the necessary go-ahead from the General Assembly.
“There’s still some things that we would have to do that we really cannot do without the official thumbs-up, which is why this is going to delay us at this point,” Kinsley told reporters. “While they may have a budget [by] the middle week of September, we needed an enacted budget or, even easier, decoupling authority.”
There are “several variables,” he added, that prevent the department from scheduling a new rollout date for expansion at this time.
“Depending on how far it slips for them to give us the final authority to move forward, it could be December at the earliest — [or] it could slip into 2024,” Kinsley said. “We’re going to work to try to make it happen as soon as possible. But again, we need their thumbs-up to move forward.”
What’s at stake?
Once implemented, expansion will loosen some of the state’s long-standing requirements for Medicaid.
The annual income limit for eligibility will increase to 138 percent of the federal poverty level, or about $20,120 a year for a single person who is older than 18 and has no children. To put that into perspective, the average annual salary for a full-time worker earning minimum wage in North Carolina is about $15,000.
About 600,000 people are expected to qualify for Medicaid under expansion. Kinsley said 80 percent of these residents “come from working families.”
“Many of these individuals are working two or more jobs,” he said. “A lot of them are working in the childcare industry, which we know is so critical for the health and development of children and for their parents to work as well.”
In addition to allowing more North Carolinians to sign up for Medicaid, expansion would protect an untold number of existing participants from losing their benefits.
During the first three years of the COVID-19 pandemic, a federal mandate prevented states from kicking Medicaid beneficiaries off the rolls. That mandate ended in April, allowing states to check participants’ eligibility and disenroll ineligible people for the first time since 2020.
Kinsley estimates that at least 18,000 expansion-eligible North Carolinians have lost Medicaid since the state resumed terminations in June. He predicts that another 9,000 will lose coverage by the end of the month.
The delay could also have financial consequences for the state, which had been promised a $1.6 billion “signing bonus” from the federal government if the legislature passed Medicaid expansion. Kinsley has said North Carolina will not see any of the money until “we enroll our first beneficiary.”
“Each month of delay costs the state hundreds of millions of dollars flowing into communities across North Carolina to support care and treatment for people and help keep providers’ doors open,” he said in a news release following Monday’s announcement.