Medicaid Reform: Why can't both sides win?

by Brad Crone, political consultant and NC SPIN panelist, January 26, 2017.

With the stroke of his pen, President Donald J. Trump stopped any Medicaid Expansion program in North Carolina. A series of Executive Orders issued by the new administration prohibits the Center for Medicare and Medicaid Services from granting any Medicaid waivers or new program extensions under the Affordable Care Act until the new Secretary and Team Trump can review them.

The Republican Congressional leadership has signaled their intent to repeal and replace the Affordable Care Act and the GOP staffers on Capitol Hill and the White House are working on a viable legislative effort that will provide a transition on the health care policy front.

In North Carolina, the Republican leadership in the State Legislatures prohibited the Governor from seeking any effort to expand Medicaid in our state. According to the NC Department of Health and Human Services, there are 1.8 million citizens enrolled in Medicaid in our state. In 2015, North Carolina’s Medicaid Program spent $13.8 million with the state contributing $3.7 billion.

Under the Affordable Care Act, states were encouraged to expanded health care insurance coverage to the working poor. In North Carolina, there would be up to 500,000 citizens eligible for the additional Medicaid coverage. From 2013 to 2016, the federal government would have paid 100% of the Medicaid costs. Then starting in 2017 the federal government would pay 95% of the expanded populations’ costs and require the State of North Carolina to match 05% of that cost with state funds. The federal contribution bottoms-out at 90% in 2020.

Independent studies have shown that Medicaid Expansion in North Carolina would stabilize our rural hospital network and would be a job creator with one study from Wake Forest University projecting that it could generate as many as 20,000 new health care jobs for health care providers.

Even with those incentives, the Republican leadership in the General Assembly wasn’t interested. Much of the GOP opposition was based on the poor budget management of the Medicaid program under the Democratic administrations of Governors Easley and Perdue.

For the past three years, the Republicans in the State Legislature, have been successful in getting fiscal control of the state’s Medicaid Program. Under the oversight of House Appropriations Chairman Nelson Dollar (R-Wake) the state has actually had a surplus in Medicaid and has established a model of predictability when it comes to forecasting expenses.

The lawmakers also passed legislation requesting a Medicaid waiver to allow for Medicaid MCOs to establish service in the state. Surprisingly, both chambers agreed to a small Medicaid expansion to allow parents of children in foster care to stay on Medicaid under the 1115 waiver application to bring in MCOs.

Governor Roy Cooper made Medicaid Expansion a cornerstone of his recent gubernatorial campaign and has fulfilled his promise to make it a priority on his policy agenda. However, the reality that we will see a Medicaid Expansion program under the Affordable Care Act is very dim indeed.

So where does that leave our state’s working poor?

These people make $35,000 to $65,000; they probably work two or three jobs to make ends meet and can’t afford health insurance coverage for their family. These are the citizens who are working hard, trying to play by rules and feel like they just can’t get ahead.

They don’t want welfare. They just want affordable, quality health care insurance and coverage.

So why can’t both sides work to make that happen?

The Republican Congress and the Republican State Legislature should have the best and brightest policy people working with the insurance industry and health care providers to find a solution to this issue.

News reports indicate the Republicans on Capitol Hill are working on a market-based Medicaid Reform Plan that will be a block-grant program to the states. This will give the states more authority and flexibility on coverages and eligibility. The big concern will be that the amount of dollars flowing from Washington to the states will be reduced – meaning the nearly $11 billion the feds provide North Carolina will be lower – adding finance burdens to the state.

So, if the federal government extends a Medicaid Block Grant to North Carolina, how can we use that grant and leverage the promise of increased flexibility to reshape our Medicaid Program to help the 300,000 to 500,000 working citizens who want and need health insurance coverage?

To be sure the Republican leadership in Washington and Raleigh can sit with Democrat Governor Roy Cooper and develop a plan that is politically acceptable and serves the best interests of the citizens of our state.

Maybe we develop a market-based insurance program with BCBS-NC or CIGNA to offer a basic health care coverage plan for patient access to a primary care physician, care for chronic disease management such as diabetes and high blood pressure, then insurance for catastrophic events such as heart-attacks and cancer.

We have many bright minds in our state. It’s time we curb the political bickering and roll up our sleeves to find a solution that can help provide affordable, quality health care insurance coverage to our working families across North Carolina. The two parties need to stop looking at scoring political points and start looking at building a real solution that can serve the needs of our state.

Let’s be honest, we are looking at a clean slate as it relates to health care policy, why not take the opportunity to build a program that can be a market-based solution but also help provide health care coverage to thousands of our citizens and in doing so, strengthen our health care delivery network in every single county.

When we look at Medicaid Reform, we need to ask the question: Why Can’t Both Sides Win?