Q&A: What you need to know about the Medicaid expansion deal between NC House and Senate

The Medicaid expansion agreement announced Thursday between the North Carolina House and Senate represents a momentous event.

With the possibility of Medicaid expansion passing into law in the next few weeks, we’ve created a guide answering questions on what expansion would mean, the terms involved and more.

What is Medicaid?

Medicaid provides health insurance coverage to millions of low-income and needy individuals across the country. It is jointly funded by the federal government and the states.

The program was first signed into law in 1965 by President Lyndon B. Johnson and initially covered only certain categories of individuals. Over time, the federal government expanded eligibility.

What is Medicaid expansion?

In 2010, with the passage of the Affordable Care Act (ACA), the Medicaid program was expanded to cover all adults with income below 138% of the federal poverty level. For households with incomes between 100% and 400%, the ACA provided subsidies to help lower health insurance costs. This was an optional expansion and not all states have opted into it.

To date, North Carolina remains one of just 11 states yet to adopt Medicaid expansion under the ACA, according to research by Kaiser Family Foundation. This means that in North Carolina, childless adults are not eligible for Medicaid, while the current income limit eligibility for a parent or caretaker is 41% of the federal poverty level.

North Carolina also provides coverage, within certain parameters, for children, people who are blind or disabled, over age 65 or pregnant.

What would expansion mean for North Carolinians?

Medicaid expansion would make 600,000 low-income North Carolinians eligible for the program as well as increase access to health care across the state, particularly in rural communities, according to the state Department of Health and Human Services.

It would also help close what many dub the “coverage gap” which refers to people who do not qualify for Medicaid and make too little to receive subsidies to help them buy insurance on a federal marketplace.

What is the status of expansion now?

The state House passed an expansion bill in February, moving the debate to the Senate.

In previous years, compromise could not be reached between the two chambers.

On Thursday, House Speaker Tim Moore and Senate leader Phil Berger announced a breakthrough. They announced a compromise bill, which they said they had not yet discussed with Democratic Gov. Roy Cooper, who has been a longtime supporter of expansion. They said they planned to meet with him later on Thursday.

The bill has not yet been filed but will be in the next week or so, Berger said.

The compromise measure is tied to the budget. This means if a budget does not pass, neither does expansion.

When would expansion take effect?

Medicaid expansion under a House-passed plan would take effect Jan. 1.

Berger indicated Thursday that timing is still up in the air on the compromise bill.

What’s in the bill?

Certificate of Need: The expansion bill will make some changes to regulations known as certificate of need (CON).

North Carolina’s certificate of need law regulates hospital expansions, new health care facilities, medical equipment purchases and more. The debate over that law was a big reason Medicaid expansion did not pass in recent years, as the Senate wanted to pass the Medicaid expansion bill with certificate of need changes and the House did not.

The compromise bill would eliminate certificate of need for behavioral health beds and chemical dependency beds.

For counties with a population of 125,000 or more, the bill would eliminate certificate of need requirements for MRI machines and ambulatory surgical centers. These provisions would become effective years down the line.

These surgical centers in large counties would have a specific requirement for how much charity care they must provide.

Reimbursements: The expansion bill will include a mechanism for hospitals to get higher reimbursements.

The bill that passed the House in February included a Healthcare Access and Stabilization Program (HASP), which would increase Medicaid reimbursement rates for hospitals. It is targeted for hospitals that have experienced losses.

What’s not in the bill?

SAVE Act: The expansion bill will not include provisions granting high-level nurses more independence.

A bipartisan group of lawmakers wants to allow advanced practice nurses who meet educational and clinical practice requirements to diagnose illnesses, administer anesthetic and prescribe medicine without physician supervision.

Last year, the proposal was tacked on to the Senate’s Medicaid expansion bill, which did not pass.

I’ve heard Medicaid expansion will bring money to the state. Is that true?

Expansion would mean more federal funding for North Carolina. DHHS broke the numbers down as follows:

• $4.8 billion a year billed to Medicaid by health care providers on behalf of the newly insured.

• $3.7 billion a year in payments to hospitals via the stabilization program.

• A one-time $1.8 billion “signing bonus” that “can support behavioral health, public safety support, rural health care, and other needs.”

• Another $1.8 billion in “back payments” if expansion and the stabilization program are approved by June 30.

A fiscal analysis of the House expansion bill estimates positive financial impacts to the state budget through 2027.

Expansion has opponents, too. One critic, Donald Bryson, president of the John Locke Foundation, told The N&O that the touted funds were “deficit spending” by the federal government that would hurt the state’s reputation for fiscal responsibility.

What is this signing bonus?

The federal government covers 90% of Medicaid coverage costs for the expansion population.

To encourage states that had not expanded Medicaid to get on board, the federal government, under the American Rescue Plan Act, increased the state’s regular match rate by 5% over the span of two years. This is what has typically been cited by lawmakers as a $1.8 billion or so “signing bonus” from the federal government.