News: CJ Exclusives

Democrats Push For Medicaid Expansion

No action likely, but McCrory, Tillis haven't ruled it out

RALEIGH — Some of the House Democrats’ most vocal advocates for Medicaid expansion in North Carolina have filed House Bill 1083, committing the state to add more of its poorest residents to the government health insurance program.

And state Sen. Floyd McKissick, D-Durham, believes a Medicaid program overhaul advanced by the McCrory administration eventually could open Medicaid eligibility to more than half a million low-income residents who lack health insurance.

While H.B. 1083 addresses a position popular among Democrats, it appears to have no chance of passing the General Assembly’s short session, based on comments from Republican leaders. Even so, several top Republicans have not ruled out some form of Medicaid expansion, so the issue remains alive.

Meantime, conservative health care analysts warn that states opting for Medicaid expansion may not be able to pare back the enhanced benefits if the federal government trims its share of the costs of higher coverage. One compares it to the Eagle’s song “Hotel California” — states that enter the program cannot get out.

The measure would require the state to cover to all residents with incomes of less than 133 percent of the federal poverty level. That change could add more than 500,000 people to the Medicaid rolls.

Bill sponsors Reps. Verla Insko, D-Orange, and Rep. Paul Luebke, D-Durham, and House Minority Leader Larry Hall, D-Durham, did not respond to e-mail and telephone requests for comment.

In a midterm election year with House Speaker Thom Tillis, R-Mecklenburg, trying to unseat incumbent Democratic U.S. Sen. Kay Hagan, every major issue the General Assembly addresses this session is being viewed through the prism of electoral politics.

Republicans are hitting hard at Hagan’s support for the Affordable Care Act, which is facing a consumer backlash over rising premium costs and decreasing coverage options. Hagan, meanwhile, has attacked Tillis in interviews and on her campaign Facebook page for refusing to back Medicaid expansion.

Medicaid expansion is an outgrowth of Obamacare. The federal government offered to pay 100 percent of the costs of newly enrolled Medicaid patients for the first three years in the states that expanded their eligibility. After that, the federal share of the reimbursement rate would shrink gradually, reaching 90 percent in 2020. North Carolina opted out of the expansion.

“At this time, no, we will not expand Medicaid, but the governor will keep the door open for all options in the future. The governor’s goal is to address the issues with the current system before expanding it,” said Ryan Tronovitch, deputy communications director for Gov. Pat McCrory.

“In terms of Medicaid expansion, in business you would never put more money into a failing business until you got the business on the right track,” Tillis said during a news conference opening the short session.

“The duly elected Democrat auditor said that hundreds of millions of dollars were being wasted” by Medicaid, Tillis said. “Once we figure out how to stabilize things so that we make sure the maximum amount possible is going to help people that really need help, then we can talk about expanding it.”

“We typically review and comment on House bills if and when they make their way to the Senate,” said Amy Auth, spokeswoman for Senate leader Phil Berger, R-Rockhingham.

But she said Berger has no plans to revisit Medicaid expansion or McCrory’s reform proposal in the short session, and referred to the Senate’s rejection of expansion last year because of would add $1 billion to state health care costs by 2019.

To varying degrees this year, Indiana, New Hampshire, Pennsylvania, Tennessee, Utah, and Virginia have examined alternative Medicaid expansion plans with elements such as private options, premium assistance, and work-search requirements.

And while the Obama administration has turned up the pressure on expansion-resistant states to reconsider, the Republican Governors Association has aired ads this year in South Carolina, Arkansas, and Wisconsin opposing Medicaid expansion.

McKissick, a member of the Senate Health Care, and Appropriations on Health and Human Services committees, said there have been “ongoing conversations for quite some time” with the governor and Republican leadership, and Medicaid expansion “needs to be revisited as a matter of coherent public policy.”

Many hospitals and doctors favor Medicaid expansion, he said, and many interest groups “are concerned about the availability of health care for low-income individuals.”

If North Carolina were to expand the program, and the federal government failed to keep its promise to maintain its matching share at 90 percent, “There’s nothing to say you have to continue providing it,” McKissick said. “You can make commensurate reductions if you chose to do so.”

But Jonathan Ingram, director of research at the Florida-based Foundation for Government Accountability, who has been studying Medicaid issues for years, cautioned against that thinking.

“Some states eager to implement this Obamacare Medicaid expansion were wary of the federal government breaking its [funding] promise, and have tried to insert what they consider triggers or circuit breakers into their expansion plans, where the expansion would be rolled back if the federal government ever actually broke its promise,” Ingram said.

“But there’s a large, looming question over whether states … can legally exit the Obamacare Medicaid expansion once they entered into it,” Ingram said.

Robert Alt, president of the Ohio-based Buckeye Institute for Public Policy Solutions, called the opt-in scenario the “Hotel California” effect — “You can opt in, but you can’t opt out.”

Alt said there’s nothing in the law allowing states entering the system to exit it, other than nonbinding promises by former Secretary of Health and Human Services Kathleen Sebellius. “They’re making an assumption based upon nothing more than naked statements made by an administration that [lied] time and time again” about the health care law, including the promise “that you could keep your plan if you liked it,” Alt added.

Ed Haislmaier, senior research fellow in health policy studies at the Washington, D.C-based Heritage Foundation, said despite the Supreme Court’s Obamacare ruling giving states the option of participating in Medicaid expansion, the section of the regulations under which the new population gains coverage is mandatory and binding in all states that sign on.

Even if the federal government allowed states to drop coverage of the expanded Medicaid population, Haislmaier said, the “affected individuals [could] have standing to go to the court, and say clearly they have been harmed, and that the court should enforce the statute as written,” forbidding newly added participants from being dropped.

Haislmaier said if, for budgetary reasons, the feds want to claw back the share of matching funds initially offered new Medicaid enrollees toward the standard match of roughly 75 percent, Washington officials have an escape valve.

Health and Human Services could simply rewrite the regulations, shifting the new enrollees from mandatory to discretionary status. States then would be left with the political burden of deciding whether to keep Medicaid expansion in place.

Alt said states trying to opt out once they have opted in face additional hurdles. If the federal government did not meet its funding promises, and a state rescinded its coverage of the newly added population, the state could lose its entire federal funding share of Medicaid programs Alt said, “the feds have a big stick, and that big stick is the ability to withhold that first dollar of Medicaid funding.”

Aside from legal concerns, Alt said, it would be nearly impossible politically for a state to drop the new entitlement if the federal government reneged on its funding promises.

“It’s not like you’re going to simply be able to drop all these individuals and not have screams, hollers, pitchforks, and torches claiming that you’re now taking away a benefit. There’s going to be political consequences,” Alt said.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.