Will NC Medicaid expansion ride tailwinds or lean into new headwinds?

By Rose Hoban

The winds sure have shifted. 

They blew one way on Jan. 30 in 2013 when leading members of the North Carolina Senate filed Senate Bill 4, which rejected the Medicaid expansion offered in the Affordable Care Act, along with other provisions in President Barack Obama’s marquee legislation. 

It took close to a decade for the winds to change direction. But they did on Wednesday, when senate leader Phil Berger ceremoniously handed over his gavel to leave the podium and stand behind his desk on the floor of the senate chamber in order to speak in favor of HB 149, a new bill that embraces the policy.

“There probably are people that have made more comments in opposition to expansion than I have, but I don’t know who that would be,” Berger said from the floor of his chamber on Wednesday afternoon.

Then he showed how far the political winds had reversed course. After a decade of what seemed to be unbending opposition, Berger told his chamber, “This is the right thing to do, and it’s not even close.”

And his chamber, 28 Republicans, 22 Democrats, fell in line. After an hour of almost universally positive comments about a policy that Berger once said would cause, “disruptions in the insurance marketplace, dropped coverage for families and higher premiums without improved access to providers,” the Senate voted 44-2 to move the policy forward on Wednesday. A final vote on Thursday of 44-1 sent the bill to the other side of the building for consideration by the House of Representatives. 

Now the bill faces steep headwinds. While expansion has long been on the top of the wishlist for Gov. Roy Cooper and legislative Democrats, and now has the backing of Berger, powerful constituencies — hospitals and physicians — are in opposition to other provisions that have been tacked onto the bill. They have supporters in the House, too.

“There are 120 people on the other side of this building that we’ve got to start working on. I’m going to do my part,” Berger told state senators on Wednesday from his rare position at his chamber floor desk pushing for a health care reform that he long opposed. 

How the weather’s changed 

Advocates and leaders at the state Department of Health and Human Services have long argued that expanding Medicaid would provide health insurance coverage to perhaps as many as 500,000 and 600,000 people in the state, many of them workers with one or two low-paying jobs who make incomes that hover just around the poverty line.

For a long time, Berger countered that expansion would bog down a Medicaid system that he claimed had been “broken,” even as it won awards for being one of the most efficient programs in the country.

That was before his chamber pushed through an overhaul of Medicaid that transformed the system from a fee-for-service system to one run by commercial managed-care companies. 

“That transformation has gone better than even the strongest proponents of transformation thought would happen, it’s gone amazingly well,” Berger said during his floor comments. “I feel very comfortable with adding the expansion population to that system.”

Berger had also long expressed doubts about the federal inducement for states to expand Medicaid. The Affordable Care Act dedicated that, in perpetuity, the federal government would pay 90 percent of the costs of the expansion population. Those people earn between the current Medicaid income threshold of 49 percent of the federal poverty level (an annual income of $27,750 for a family of four) and 138 percent of the federal poverty line ($38,295 for a family of four). 

Usually, the federal government pays about 68 percent of the Medicaid costs, with North Carolina picking up the rest.

To date, 38 states and the District of Columbia have gobbled down that sweetener from the federal government, expanding to add millions nationwide to the program, which usually is reserved for children in low-income families, some of their parents, low-income seniors and people with disabilities.

“If the federal government ever changes the 90/10 split, North Carolina’s out,” Berger said on Wednesday. 

Then he continued, “it’s not going to happen. We’ve had a situation where we’ve had Republican presidents and Republican Congresses, Republican presidents and Democratic Congresses, Democratic presidents and Republican Congresses, Democratic presidents and Democratic congresses, and they’ve not changed it over the past 12 years… It’s baked in at this point.”

He went on to claim that the feds paying 90 percent of the freight for Medicaid patients is “terrible fiscal policy at the federal level, but it is actually good fiscal policy at the state level for us to say yes to this.” 

That’s because the bill now approved by the state senate would increase a bed tax paid by hospitals, something they pay for the ability to bill Medicaid, which now has about 2.7 million beneficiaries.

Even if Berger questioned why the federal government would do this, it could be good federal policy, too. Some of those new beneficiaries will move from buying plans on the Obamacare marketplace, where they get federal subsidies that covers the whole cost for a private insurer’s plan. Instead, even with the federal government paying 90 percent of Medicaid costs, the government could save some money because North Carolina’s new managed care system is more efficient than traditional insurance coverage. 

State officials said they’re unsure how many of the 500,000 or 600,000 people who will end up on Medicaid fall into that bucket, but it’s likely to be tens of thousands of people. 

Berger also said he came to see how many of the people who would receive expanded Medicaid benefits were not free-riding on the system, but were people who were working at jobs in the food industry, as farm workers, even as church pastors. 

“I don’t know that I had the right focus as far as the incentives are concerned,” Berger said Wednesday. He went on to talk about low-income workers who can support their families but who have little else to pay the $600 to $700 per month for private health care insurance. So when they get sick, they end up out of work and receiving care from emergency departments with costs eaten by hospitals.

Turbulence 

There’s plenty in the bill that’s giving different constituencies heartburn and incentive not to blow with the changing winds. For one thing, physicians are dead set against provisions in the bill that would give advanced practice nurses more independence in their practice, and remove physician supervision. 

Spruce Pine Republican Sen. Ralph Hise called it “supervision in name only.” 

“North Carolina’s ‘paper’ supervision law for nurse practitioners simply requires a 15-minute phone call every six to 12 months with a supervising physician,” he said. 

Hise also noted that in his rural mountain home of Avery County, there are no anesthesiologists, only certified nurse anesthetists. Language in the bill would give those CRNAs more independence in their scope of practice.

“There are over 90 hospitals in North Carolina that do not even employ or use anesthesiologists, and a few dozen more where the anesthesiologists are not on site after hours or on weekends,” Hise said. “Thirty-four states have full practice authority for CRNAs. This is the direction the entire country is moving. Not one of those states have reversed course because of any issues with patient safety or outcomes.”

Various bills to allow this full practice authority for advanced practice nurses have been floated over the past several decades but have always been spiked before they could receive a vote.

In addition, hospital leaders are of two minds about the bill. 

There’s language in the Expanding Access to Healthcare bill that would allow North Carolina to pull down federal dollars via the Healthcare Access Stabilization Program, a priority of the state hospital association. HASP is a federal regimen that the state now has access to because North Carolina moved to Medicaid managed care and provides more robust funding to hospitals as a result. Those new dollars, as much as $3.2 billion, could flow to hospital coffers.