News: CJ Exclusives

Hospitals not on board with Cooper’s Medicaid plan

Governor lacks key ally for proposal as critics and skeptics note that Obamacare may not be around much longer

National Medicaid policy analysts and North Carolina legislative leaders believe Gov. Roy Cooper has taken an extremely unwise course to expand the state’s Medicaid rolls.

The governor also lacks a key ally in his efforts to add thousands of able-bodied North Carolinians to the government entitlement program: The North Carolina Hospital Association, which said it would not support the action without legislative and congressional backing, both of which seem elusive.

Expanding Medicaid would require the state to provide a 5 percent funding match for the 95 percent federal share.

Cooper said the state’s hospitals “would be able to have the ability to provide the state match, and that way we wouldn’t have to have the taxpayers to pay for it. … And I hope that the hospitals will be receptive so that the General Assembly won’t have to come up with an appropriation to do this.”

Julie Henry, a spokeswoman for the North Carolina Hospital Association, said the organization has not endorsed Cooper’s plan, and it’s too early to talk about state funding mechanisms.

“Hospitals and health systems already pay for more of the share of caring for individuals on Medicaid in the hospitals than the state does,” and have for several years to allow the state to draw down its share of federal Medicaid funds, “and that’s without Medicaid expansion,” Henry said.

“I think that we’ve certainly demonstrated our willingness and commitment to ensure that people can get the care they need, and certainly we’re picking up the bill for people who are currently uninsured,” she said.

However, she said, “It’s a very uncertain time about the future of [the Affordable Care Act], and about the future of the Medicaid program,” and how its funding might be affected by a Republican Congress that has made repeal of Obamacare a longstanding crusade.

The hospital association’s leadership and its member hospitals “feel strongly that coverage expansion is only going to happen when we have a bipartisan, collaborative effort. So if that is something that can be achieved in North Carolina we are ready to sit at the table, roll up our sleeves, and ready to make Medicaid expansion happen,” Henry said.

State legislative leaders, the state’s congressional delegation, and Cooper all would have to agree to a plan for the hospital association to join in, she said. Until such a pact is in place, discussion of who pays the state match, which could be hundreds of millions of dollars, is premature, she said.

“We have to accept Medicaid expansion being offered to our state. It will provide us significant investment,” Cooper told business leaders Wednesday at the 15th annual Economic Forecast Forum sponsored by the North Carolina Chamber and the North Carolina Bankers Association.

“I’m planning to file an amendment to our plan by Friday. I believe that time is of the essence,” Cooper said of his proposed unilateral request to the federal Centers for Medicare and Medicaid Services to add uninsured people to the state’s Medicaid program for the poor, elderly, and disabled.

Medicaid expansion is needed “to light a fire in our rural economy,” and to keep rural hospitals “from being bulldozed,” Cooper said. He estimated 20,000 to 40,000 jobs would be created, $2 billion to $4 billion in annual federal health-care investment would flood the state, individual health-care expenses and state health plan costs would drop, and taxpayer contributions would dip.

“This is a vital step in protecting North Carolinians who have been shut out of the process over the past three years. We need to put political ideologies aside and act in the best interest of the people we represent. The expansion of Medicaid in North Carolina does just that,” Senate Democratic Leader Dan Blue said in a written statement.

Senate Leader Phil Berger, R-Rockingham, reacted harshly in a written release.

“Just days into his term as governor, Roy Cooper already intends to violate his oath of office with a brazenly illegal attempt to force a massive, budget-busting Obamacare expansion on North Carolina taxpayers,” Berger said.

“Cooper is three strikes and out on his attempt to break state law,” Berger said. “He does not have authority to unilaterally expand Obamacare, his administration cannot take steps to increase Medicaid eligibility, and our Constitution does not allow him to spend billions of state tax dollars we don’t have to expand Obamacare without legislative approval.”

Berger said legislative leaders plan to ask Congress and CMS to disapprove Cooper’s “illegal power grab.”

House Speaker Tim Moore, R-Cleveland, and Majority Leader John Bell, R-Wayne, issued a statement saying Cooper “lacks the authority to implement his proposed plan, and cannot unilaterally raise taxes on the people of North Carolina.” They said Republicans have built tax cuts into their budgets, “and we do not support his plan to undo the relief we provided.”

“The General Assembly is not yet in session, and Governor Cooper is already seeking to break a law and cost North Carolinians $6 billion over the next decade,” said Americans for Prosperity’s North Carolina State Director, Donald Bryson. “Expanding Medicaid is a completely irresponsible policy.”

Cooper acknowledged the law passed in 2013 that proscribes anyone but the General Assembly to seek Medicaid plan amendments, but brushed aside concerns over the legality of his plan.

“You’ve got a new legislature now, a new budget time, and I do believe that it invades on the core executive authority of the governor to accept federal funds, to look out for the public health of the people,” Cooper said. “But I would rather not get into a dispute with that. I think it’s important for us to try to be cooperative.”

While Cooper claimed that North Carolina tax dollars are being used to pay for Medicaid expansion in other states, Nic Horton, a senior research fellow at the Florida-based Foundation for Government Accountability, said that isn’t true. He cited a Congressional Research Service report that debunks such claims.

“There’s not just a big pot of money sitting in D.C. that’s being doled out. If states don’t expand, that money is simply not added to the national debt,” Horton said.

“It’s pretty clear that any unilateral action to expand Medicaid in North Carolina would be illegal. The legislature has wisely acted to protect North Carolinians from this type of overreach by passing Senate Bill 4 of 2013,” Horton said. Aside from the legality question, expansion “is simply bad policy.”

“These promises of job creation, and economic stimulus are the same empty promises we hear in states across the country,” Horton said.

“In Kentucky, Obamacare supporters promised to create over 5,000 new hospital jobs. Instead, they lost over 1,200 in the first year of their Obamacare Medicaid expansion. In Arkansas, consultants promised over 1,000 new hospital jobs, but they lost over 800 hospital jobs in the first 18 months of expansion. A similar story has played out in Iowa as well,” he said.

Josh Archambault, a senior fellow at FGA, said he had no optimism North Carolina would achieve the promises Cooper is making and questioned the governor’s timing.

“Why you would expand a program that Congress is actively changing the financial landscape on you,” with steps already being taken to dismantle Obamacare, makes no sense, Archambault said. “I’m not sure why in a world of uncertainty you would step over that cliff without knowing what’s below.”

While advocates in expansion states may claim success because more people now have Medicaid cards, Archambault said more pertinent measures exist.

“Has it changed people’s behavior? Are they healthier as a result of Medicaid coverage? Has it not adversely affected other areas of the budget? Are you spending less money on education, kids, on roads and public safety as a result of Medicaid expansion?” he said.

“The answer is pretty clearly no,” Archambault said. “All of those adverse effects are starting to play out and are going to be more acute in states as they have to pick up a greater share of the costs.”

Under the Obamacare Medicaid expansion rules, the federal government pays states nearly twice the amount for an able-bodied adult to be added to the rolls compared to a traditional Medicaid enrollee — the disabled, elderly, and children — would receive.

“So when you have to make some hard budgetary decisions, you go after the most vulnerable first” because the federal revenue share is lower for them, Archambault said. There are 600,000 people with maladies ranging from developmental disabilities to traumatic brain injury on waiting lists for services nationally, while able-bodied single adults gain coverage.

“How immoral is that that we’re not living up to the commitment to the most vulnerable, we’re expanding to this other population,” Archambault said. And, contrary to the contention the Medicaid expansion population is uninsured, “in other states [it] has been shown 30, 40, 50 percent of them have private coverage” before they shift to Medicaid.