Gov. McCrory says North Carolina may be forced to expand Medicaid

kgarloch@charlotteobserver.comOctober 23, 2013 

Citing new federal regulations, Gov. Pat McCrory said this week that North Carolina could be forced to expand Medicaid to more low-income people, despite the legislature’s vote earlier this year to reject that option under the Affordable Care Act.

In a speech at the Heritage Foundation, a conservative think tank in Washington, McCrory said the decision about whether to expand Medicaid is “one of the most difficult issues on the governors’ plates right now.”

“We just got a new (regulation) which might in fact force us to do Medicaid expansion whether we want to or not,” McCrory said. “I’m in a very difficult position on what decision to make.”

McCrory was referring to a federal regulation under the health care overhaul that expands the ability of hospitals to presume that some uninsured patients are likely to qualify for Medicaid, the government health insurance program for the poor and disabled. Hospitals can then bill the state for the care of those patients for up to two months until a final determination is made.

But if the hospital incorrectly signs up someone who is not eligible, McCrory said the state “still has to pay that two months” and can’t recoup the Medicaid reimbursement.

Hospitals are allowed to make “presumptive eligibility” decisions to ensure that people who are eligible for Medicaid but not yet enrolled can be immediately enrolled if they show up at a hospital needing care.

North Carolina currently allows hospitals to presume Medicaid eligibility for low-income pregnant women and newborn children. But McCrory spokesman Ryan Tronovitch said the new federal rule allows hospitals to determine “presumptive eligibility” to other groups of people, such as low-income parents, former foster children, and low-income women with breast or cervical cancer.

A spokeswoman for the federal Centers for Medicare and Medicaid Services disputed McCrory’s understanding of the regulation, which was published in July. She said hospitals are required to follow the Medicaid criteria in their state. She said the rule does not permit hospitals in states that didn’t expand Medicaid to give “presumptive eligibility” to patients who would have qualified under the expansion.

Adam Linker, a policy analyst with the North Carolina Health Access Coalition, agreed that the rule allows hospitals to give “presumptive eligibility” only to patients who would be eligible under the state’s current Medicaid criteria, not those who would have qualified under the expansion.

“It really has nothing to do with the Medicaid expansion,” Linker said. “McCrory is implying that hospitals could enroll all low-income people on a temporary basis, which is not the case.”

What the law requires

The Affordable Care Act, commonly called Obamacare, relies on three ways to provide insurance.

The law, which requires almost all Americans to buy health insurance or pay a fine, allows people who have coverage through their jobs to keep that insurance. It also created an online exchange where individuals can buy private insurance with government subsidies. Finally, it called for the poorest of the uninsured to be covered by expanding Medicaid.

But last year, when the U.S. Supreme Court upheld the constitutionality of the law, it also ruled that states couldn’t be mandated to expand Medicaid.

North Carolina is one of about 25 Republican-led states that chose to reject the Medicaid expansion. North Carolina has about 1.5 million uninsured residents, and about a half million would have qualified for Medicaid under the expansion, according to census figures.

Under the Affordable Care Act, the federal government will pay 100 percent of the Medicaid expansion cost for the first three years. After that, the states would start paying 10 percent. But McCrory said he didn’t want to expose the state to the unknown cost. “One of the reasons I didn't do that is because I didn’t know 10 percent of what,” he said.

In rejecting the expansion, McCrory also cited concern about the cost of offering Medicaid to an additional half-million people. Medicaid makes up 15 percent of the state’s $20 billion overall budget. The federal government pays about two-thirds of the cost for current participants, or about $11 billion, and the state paid $3 billion in the 2012 fiscal year.

McCrory also expressed concern about whether the federal government would pay its share of the cost to expand in light of the U.S. budget deficit, which has exceeded $1 trillion in each of the past four years.

Expansion advocates speak out

In response to McCrory’s comments, advocates for Medicaid expansion began taking credit for moving the governor to reconsider the state’s position.

“Our efforts are paying off,” said an email from Gerrick Brenner, executive director of ProgressNC Action. “After we launched our petition calling for the expansion of Medicaid, Governor McCrory went on record saying he is considering doing just that.… Let’s keep up the pressure.”

State Rep. Carla Cunningham and State Rep. Beverly Earle, both Democrats from Mecklenburg County, said Wednesday they are preparing a resolution to submit to the legislature that would encourage McCrory to accept the Medicaid expansion. Cunningham said they are hoping to get the other seven Mecklenburg Democrats in the legislature to sign on, and she hopes the governor would request a special legislative session to vote on the resolution.

Based on estimates from the N.C. Justice Center, Cunningham said the expansion would have brought $15.5 billion in federal tax dollars to the state’s health care providers over the next six years, including $5.1 billion in 2014 alone.

North Carolina’s hospital lobby is also pushing for Medicaid expansion, to provide reimbursement for care that poor people are currently getting for free.

“It would be a wonderful thing to reconsider and expand Medicaid,” said Don Dalton, spokesman for the N.C. Hospital Association. “If those people could get primary care and don’t need to use our emergency departments, that in itself would help lower the cost of care for everyone.”

Follow Ohio’s example?

Under North Carolina law, any decision to expand Medicaid would be up to the legislature.

But state Rep. Justin Burr, a Republican co-chairman of the state House Health and Human Services committee, said he doesn’t see that happening.

“I don't think there’s any intent by the leadership at the legislature to reverse course on Medicaid expansion,” said Burr, who represents Montgomery and Stanly counties.

But Cunningham said McCrory might be able to follow the example of Ohio Gov. John Kasich.

Ohio recently received approval from the federal government to expand Medicaid, but Kasich still needed legislative approval. The Republican-controlled legislature has balked at expansion, so the governor turned to a little-known and quietly powerful legislative panel, called the Controlling Board.

The Ohio board is made up of six lawmakers and an administration official and handles certain adjustments to the state budget. It approved Kasich’s spending request by a 5-2 vote. Several Ohio Republican legislators have sued.

Cunningham said she is doing research to find out if there is a similar board in North Carolina. She would like McCrory to reverse his decision so the state could receive federal reimbursement for Medicaid expansion in 2015 and 2016.

“If it’s going to happen, it needs to happen soon,” she said, “because we will lose those funds to other states.” John Murawski of the (Raleigh) News & Observer contributed.

Garloch: 704-358-5078

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