NEW HANOVER COUNTY — North Carolina will become the 40th state to implement federal Medicaid expansion on Dec. 1, 2023.
Gov. Roy Cooper and North Carolina Department of Health and Human Services Secretary Kody H. Kinsley announced the start date on Monday after the timeline was pushed back from Oct. 1 due to budget delays.
Cooper called it overdue in a press release, as well as a “monumental achievement that will extend health insurance to people who need it.”
“This means better health care, including those with mental health and substance use disorders, hope for rural hospitals struggling to stay open and billions of dollars for our economy,” he added.
The announcement comes after Cooper said he would allow state Republicans’ budget bill, nearly three months late, to take effect without his signature. The governor said the budget was bad overall, but did not want to holdup the expansion any longer.
Though it passed in March, the bill to extend Medicaid coverage to more than 600,000 North Carolinians was tied to passage of the state’s budget. All tri-county legislators aside from Rep. Carson Smith (R-Pender County) voted in support of the measure.
The expansion is aimed at closing the “Medicaid gap,” which includes hundreds of thousands of low-income North Carolinians that can’t afford health coverage because they earn too much to qualify for the program as it is currently structured. As is, it mostly provides for children from families with low incomes, some of their parents, people with disabilities and seniors with limited financial means.
The expansion increases the eligible population to adults aged 19 to 64 who have incomes up to 138% of the federal poverty level. For example, expansion gives health care coverage to single individuals making under $20,000 a year. Likewise, a family of three earning under $34,000 combined will now be eligible.
According to the bill, the federal government will pay 90% of Medicaid costs while the state will cover the remaining 10%. However, it stipulates individual’s coverage under the expansion will be discontinued if the federal percentage falls below 90%.
Estimates for North Carolina’s coverage costs range from $224 million in the first year to about $700 million by the fourth year. Those costs will be covered by a hospital tax; in return, the hospitals will be able to take advantage of the federal Healthcare Access and Stabilization Program that boosts how much hospitals are paid for serving Medicaid patients. Hospitals are paid significantly lower for Medicaid patients versus the commercially insured.
In New Hanover County, an estimated 17,000 people will qualify for Medicaid coverage, according to Tonya Jackson, social services director at New Hanover County Health and Human Services. Port City Daily spoke with her May 3 in anticipation of a budget passage before the fiscal year’s end on June 30.
“We will be able to provide coverage to our working class who fall in that gap of 138% of the poverty income level,” Jackson said. “So they make too much money to receive Medicaid currently, but they really can’t make enough money to pay for health insurance at the private rate, or either they work in jobs where the health insurance is not offered … so we’re going to have a healthier workforce.”
Jackson added the expansion is also a boon to veterans and those living in rural areas, giving them opportunities to access routine care.
Critics of the bill say the expansion will lead to a surge in demand and wait times for services, increase state taxes and inflation, and drive up expenditures on Medicaid.
“People who would normally be running to the emergency department right now are going to need primary care providers,” Jackson said. “One concern of mine is the number of providers that we have in the county to accept these new individuals that can be covered.”
Nursing staff shortages have gotten most of the spotlight in national and local coverage, but Jackson said she was focused on whether the county has enough specialists and Medicaid providers. Not only will medical staff be needed, but in May, Jackson said the county will need an additional 10 to 14 people to process the influx of applications and support the program’s newcomers. The state legislation includes some funding to assist that need.
As far as a surge in demand, Jackson tempered those concerns.
“People will apply, but because they have an application does not mean they have eligibility, so we have a little bit of a trickle in effect,” Jackson said. “
She said the hospitals may see an influx of patients in the first 90 days, but if the county has enough providers, those in need could be spread out across more facilities.
Though healthcare experts have flagged concerns over healthcare rates, Johns Hopkins researcher Ge Bai and former Delaware Health Care Commission executive director Ann Kempski told the News & Observer in July the Healthcare Access and Stabilization Program could allow hospitals to increase costs, triggering private insurers to raise their premiums — and there is no cap on how much they can do so.
Hospitals aren’t the sole decision-makers in pricing; they also have to negotiate with insurance providers. Barak Richman, a healthcare policy expert at the Duke-Margolis Center for Health Policy, told the N&O if a big hospital system like Atrium threatens to leave negotiations, insurance companies may have little leverage.
Jackson told PCD the benefits of expanding Medicaid outweigh the challenges the state will be faced with.
“My hope is that our hospitals and our providers will not be subject to non-payment of individuals that they are caring for because they are not covered, and that we will be able to put more money back into our local economy,” Jackson said. “Because if we have 17,000 more people receiving Medicaid, that’s 17,000 more people who are going to be using your local mom-and0pop pharmacy. There’s more people who are going to be going to your big box stores like Walgreens, Walmart, CVS — they’re going to have more individuals coming in to access services because they have the ability to do so now.”
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