Lambeth Medicaid

N.C. State Rep. Donny Lambeth, R-Forsyth, speaks as a panelist at a town hall about the future of Medicaid expansion in North Carolina in 2016.

A potential Medicaid expansion bill resurfaced unexpectedly in the House on Monday as the legislature braces for a potential vote to override Democratic Gov. Roy Cooper's veto of the Republican-conceived state budget.

An override vote could take place today, considering the budget bill is on the House floor agenda. The state entered a new fiscal year July 1 with about 90% of state operations continuing.

House Bill 655 had lain dormant since being introduced April 9 by Rep. Donny Lambeth, R-Forsyth, as a second attempt at a bipartisan plan to potentially add or expand coverage for at least 543,000 North Carolinians.

The bill, titled "NC Health Care for Working Families," represents significant elements of the Carolina Cares legislation that Lambeth introduced with no success in 2017.

HB655 is scheduled to be heard at 10 a.m. Tuesday in the House Health committee.

"I hope it is a viable alternative to Medicaid expansion that would be viewed as an option," Lambeth said.

"This alternative and the willingness of House leadership to move it forward is a good-faith gesture to move this budget forward. We are already into a new state year and we need to have it approved to fund the vital programs included."

Medicaid serves 2.14 million North Carolinians, representing about 21% of the state population. About 1.6 million of those individuals are scheduled to be enrolled in managed care starting in November in the Triad and parts of the Triangle, and statewide in February.

Managed care is a system in which patients agree to visit certain doctors or hospitals and the cost of care is monitored by a a management company.

HB655 retains two controversial elements. Some Medicaid recipients between the ages of 19 and 64 would be required to work. The state would also require health care systems and prepaid health plans to pay for the state’s 10% share of additional administrative costs.

Healthcare systems and prepaid health plans would pay $758 million annually.

The federal government would pick up the remaining 90% through provisions in the Affordable Care Act.

Participants would be required to contribute up to 2% of their household income toward an annual premium, billed monthly. There are some exceptions to the requirement.

“There will be at least 300,000 individuals who will be covered by expansion, and another 200,000 who would find this as a viable, lower-cost health insurance option compared to what they are currently eligible for,” Lambeth said.

He says the plan covers more people, helps rural hospitals and rewards participants for taking care of themselves — without the state paying for expansion with its operating funds.

"It will actually save the state money as the subsidy to state hospitals decreases," Lambeth said.

Budget uncertainty could boost plan

The fate of HB655 remains uncertain. Senate leader Phil Berger, R-Rockingham, has been an adamant opponent of any expansion initiative.

However, the possibility of Republicans being unable to override Cooper's state budget veto, particularly in the House, may make HB655 a more viable option.

The GOP needs at least one Democrat in the Senate, as well as at least seven Democrats in the House, to vote to override the veto

Berger has expressed willingness to hold a special session on health care once the state budget is signed into law. Cooper has said he would support a two-track path to getting the state budget passed, with one including a focus on Medicaid expansion and health care.

Yet, Democratic legislators and analysts say Cooper's leverage for expanding Medicaid lies primarily in getting Republicans to add some form of expansion in the state budget.

“House speaker Tim Moore signaled during the latest floor debate over the state budget that he would be open to this proposal, which resembles Medicaid expansion," said Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation.

"It’s possible that a formal discussion of this plan is linked to Moore's effort to round up Democratic votes for a budget veto override."

Kokai said that if the House fails to override the veto, "it will be interesting to see how discussion of House Bill 655 proceeds."

"I would not be shocked to see this meeting canceled or delayed as behind-the-scenes budget discussions continue.”

John Dinan, a political science professor at Wake Forest University and a leading state legislature expert, said he doubts the Senate would support HB655 if it cleared the House.

"There is only the slightest of daylight between this House Medicaid expansion plan and a traditional Medicaid expansion plan of the sort favored by the governor," Dinan said.

"To the extent that there is some daylight between the two plans, most notably in the work requirements and premium and copayment requirements for Medicaid recipients, several of these key features are tied up in federal court litigation, leading to dim prospects of their actually being implemented."

"One of these (federal) decisions even cast doubt on the validity of premium requirements, or at least blocked a federal waiver that allowed imposition of a premium requirement."

Opioid crisis prompts support

Dr. Greg Murphy, R-Pitt, said he agreed to be a co-sponsor for HB655 because of the potential for the Carolina Cares bill to play a positive role in resolving the state’s opioid problems.

Only one in every six individuals treated in a hospital emergency department for an opioid overdose has regular access to primary care or has health insurance coverage, Murphy said.

Of those who survive the overdose, Murphy said the reality is that the five out of six who don’t have accesses to care will not pursue or receive treatment and may overdose again.

A key change from the 2017 bill, Lambeth said, is that some of the 90% federal government match would be dedicated to providing rural counties with grant funding for health care needs. Grants would be limited to $1 million per year.

Among the option for the money are physician recruitment, expanding tele-health services, expanding broadband services, loan forgiveness programs, start-up funding for new clinical patient services, physician retention incentives and infant mortality reduction initiatives.

The goal is having the legislation in effect by July 2020. Lambeth said it would take at least a year for federal Centers for Medicare and Medicaid Services to approve a required waiver if the bill were to become law.

The federal centers made clear Oct. 25 it would not consider Medicaid expansion proposals — including a requirement that some recipients must work to receive benefits — unless these are first approved by a legislature.

'Despite shortcomings ... a huge step forward'

Cooper’s budget plan recommends expanding Medicaid “to bring $4 billion into North Carolina’s economy, create an estimated 40,000 jobs and provide more affordable health care for 500,000 people,” according to a statement from his office.

The N.C. Healthcare Association said in April it supports HB655 “as a common-sense option” to close the coverage gap and increase affordable access to health insurance for working individuals and families in North Carolina.”

“Other states that have created expanded coverage options are already seeing significant improvements in health outcomes as a result,” said Steve Lawler, the association’s president.

The N.C. Medical Society has said the legislation “is the right thing to do for hard-working, low-income North Carolina families who need access to care. We hope the General Assembly will take this up sooner rather than later.”

Advocacy group NC Child has said it supported the bill "despite its shortcomings. ... It is a huge step forward."

"We want the best outcomes possible for North Carolina’s kids — and that means they need healthy parents who can take care of them."

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