NC House approves Medicaid expansion bill, moving debate to Senate

The North Carolina House passed a bill to expand Medicaid on Thursday that would grant health insurance coverage to thousands of low-income residents.

“I’m actually very proud to be part of this body,” Rep. Donny Lambeth, one of the bill’s primary sponsors, said before the vote. “This is a part of history, and we need to advance this bill, move it forward so we can begin some serious discussions with the Senate on how do we make this happen for the state of North Carolina and for people who benefit from this.”

The bill passed 92-22 with broad bipartisan support, though it could face obstacles in the Senate where leader Phil Berger has expressed reservations about the proposal.

Both Republican-controlled chambers now support the idea of expanding Medicaid after years of resistance but want to take very different approaches.

Lambeth, a Forsyth County Republican, said Wednesday that expansion “makes financial sense for our state.”

Expansion would help “rural North Carolina, which continues to struggle with health care” as well as “our mental and behavioral health care system which is in need of reform and funding,” Lambeth said.

The House approved a change Wednesday called for by Republican Rep. Keith Kidwell that if there were any indication that work requirements as a condition of participation in the Medicaid program could be authorized by the federal government, that the state authorize them.

The House also amended the bill to establish a pilot program to provide forgivable loans to eligible students who agree to practice medicine or nursing on a full-time basis in rural areas.

Lambeth told lawmakers earlier this week the bill had “been wildly debated across the state” and had “several associations and groups endorse it” including the N.C. Association of County Commissioners and N.C. Sheriffs’ Association. “Obviously, there’s some who don’t particularly like this bill,” he added.

But expansion is about “that person, whether they be a veteran, or a farmer that risks losing their farm because they have some catastrophic health care bill that they can’t pay,” said Lambeth, a retired hospital administrator who said he had worked in health care for 40 years.

“It’s really about helping the people of North Carolina,” he said Tuesday. “ Let’s get them out of the emergency room. Let’s get them into primary care practice.”

Rep. Wayne Sasser, a Republican from Albermarle and a bill sponsor, said Tuesday expansion would “help our rural hospitals, and North Carolina is still 80% rural.”

Sasser said the legislature was in conversation with the state Department of Health and Human Services about using funds from expansion for mental health programs. He said the bill would provide “a lot of money that will help mental health, which is the biggest health issue that not only in North Carolina, but in the United States.”

What’s in the Medicaid expansion bill?

House Bill 76 would become effective Jan. 1, 2024. The lengthy bill includes a workforce development program, which lays out that the state should help people enrolled in Medicaid access workforce development services, and a program called the “healthcare access and stabilization program” to increase reimbursement rates under Medicaid.

The North Carolina Healthcare Association, an interest group that represents hospitals, backed the use of the stabilization program.

According to Cynthia Charles, a spokeswoman for the association, North Carolina hospitals take on a $2.3 billion reimbursement gap for safety-net services to low-income patients because of high Medicaid assessments and unreimbursed costs of covering the uninsured. Safety-net hospitals provide health care for individuals regardless of insurance status.

Both Charles and Lambeth said the federally funded HASP program would help hospitals at no cost to the state and may even be a financial benefit to the state.

“Overall, we think this is a great start and we thank the bill’s sponsors,” Charles said.

The expansion bill says if the federal government cost share for people enrolled in expansion falls below 90%, coverage for these individuals “shall be discontinued as expeditiously as possible.”

To encourage states that had not expanded Medicaid to get on board, the federal government in 2021 temporarily increased its contribution for Medicaid expansion to states that have not passed expansion.

Lawmakers and DHHS Secretary Kody Kinsley have touted that under that law, the American Rescue Plan Act, North Carolina would get a $1.5 billion “signing bonus” that would pay out over two years.

The bill is tied to the budget. If no budget bill is passed by Dec. 31, 2023, the expansion bill would not become law.

What would expansion mean for North Carolinians?

Expansion would open the door for over 600,000 low-income North Carolinians to access health care coverage across the state, particularly in rural communities, according to an estimate by DHHS.

North Carolina would be one of the last states to adopt Medicaid expansion under the Affordable Care Act, which expanded the Medicaid insurance program to cover all adults with income below 138% of the federal poverty level.

Currently in North Carolina, childless adults are not eligible for Medicaid, while the income limit eligibility for a parent or caregiver is 41% of the federal poverty level.

That means a qualifying family of four must make under $40,000 before taxes to be eligible.

This leaves many low-income North Carolinians, who don’t have employer-provided health insurance, without access to Medicaid. They also may make too little to qualify for financial help via the the federal Health Insurance Marketplace. This means their incomes, though below the poverty level, are too high for Medicaid and too low for health credits.

This phenomenon, often known as the coverage gap, leads to people relying on emergency departments or federally funded health clinics, which serve medically undeserved populations.

Compromise still questionable

Whether the Senate takes up the House bill or files its own bill remains to be seen but so far, signs do not point to compromise between the two chambers.

Last session, negotiations between the House and Senate failed to lead to a law largely because of disagreements on health reforms. The Senate wanted a bill that included cuts to regulations for health care providers and nurses, while the House wanted what it called a “clean bill.”

The House bill passed Tuesday does not include these contentious regulation cuts.

Last week, Berger told reporters that the House bill was “not the bill that we need in North Carolina expanding Medicaid.”

In late January, the Senate filed a bill repealing North Carolina’s certificate of need regulation, a health law that requires providers to get approval by the state for new facilities and more. This repeal is one of the main sticking points with the House.

Sen. Jim Burgin, a Harnett County Republican and one of the certificate of need bill sponsors, said Feb. 4 during a mental health panel in Chapel Hill that there was a 90% chance Medicaid expansion would pass, and that CON regulations are important to tackle because they signify a “multi-year process” and can cost a lot of money, money that’s “not spent on health care.”

Burgin also said that he had been on calls “three different times with the White House” to propose an idea for Medicaid dollars to be used to pay for people on Medicaid “to go to a community college.”

Asked last week if the House bill had consensus from the Senate, House Speaker Tim Moore said his caucus was “always hopeful the Senate will see that we have sent them the perfect deal and pass it. But usually that doesn’t happen.”

“I suspect we’ll pass something to the Senate, they won’t take it up immediately, and they’ll send something over. That’s just the nature of it,” Moore said.