News: CJ Exclusives

Managed-Care Group Calls for Medicaid Expansion

GOP lawmakers, free-market analysts counter that expansion would shift patients from private insurance to public dole

N.C. Health and Human Services Secretary Rick Brajer addresses an April legislative oversight committee meeting. (CJ photo by Dan Way)
N.C. Health and Human Services Secretary Rick Brajer addresses an April legislative oversight committee meeting. (CJ photo by Dan Way)

The continuing calls to expand Medicaid coverage under the Affordable Care Act have a seemingly unlikely ally — Medicaid Health Plans of America, the trade association representing a number of top Medicaid managed care organizations. Some MHPA members likely will compete for contracts under the Medicaid reforms approved last year by the General Assembly.

“We absolutely believe at MHPA that expansion’s the right thing to do, and that we are supportive of states moving to expand care to the working poor,” said Jeff Myers, MHPA’s president and CEO.

“But we also firmly believe that the state needs to do it in a way that is fiscally responsible, and is appropriate for their citizens,” Myers said. MHPA member organizations already operating in North Carolina would like to see a transition to a model offering fixed payments per patient to providers, allowing higher spending on patients with more expensive medical conditions (or “risk-based adjustments”), “and as that transition occurs it may make sense to roll out some expansion,” he said.

However, Myers cautioned, the system must be fixed first.

“Almost all of the states that have done expansion have done it almost completely using a managed care model. None of them are just expanding their population into fee for service, or even a [primary care case management] model” similar to the one North Carolina has used through the private nonprofit Community Care of North Carolina, Myers said.

Myers noted that states like Oregon and Washington have capped payments to providers with risk adjustments as they expanded Medicaid, and North Carolina would benefit from a similar approach.

“The state will get real value out of expanding care to those that are going to need the care anyway,” he said, and MHPA does not advocate a particular model because the organization says states are in the best position to design a program specific to their needs.

“I don’t agree with him at all,” said Jonathan Ingram, vice president of research at the Florida-based Foundation for Government Accountability. “Medicaid expansion would be a bad decision even if North Carolina’s Medicaid program was perfect.”

Expansion would create a new welfare entitlement for hundreds of thousands of able-bodied, mostly childless adults who have never qualified for other types of long-term welfare, he said.

“That expansion would discourage work, shrink the economy, and trap more individuals in poverty and dependency,” Ingram said. “And worst of all, Obamacare’s funding scheme would prioritize welfare for these able-bodied adults over critical services for the most vulnerable.”

North Carolina is taking steps to improve its Medicaid program to make sure it works for those who rely on it, he said. But even after the Medicaid program is fixed, it would be a mistake to expand Obamacare.

“States that expanded Medicaid under Obamacare are now seeing far more able-bodied adults sign up than they thought would ever enroll or, in many cases, would ever even be eligible,” Ingram said.

With cost overruns mounting, lawmakers are scrambling to find the money to cover the state’s share of the costs, which start coming due in next year’s budgets, he said.

“Ultimately, that will mean raising taxes, taking resources from other critical needs like education and public safety, or siphoning off existing Medicaid resources currently dedicated to poor children, pregnant women, seniors, and individuals with disabilities,” Ingram said.

State Sen. Ralph Hise, R-Mitchell, said among his concerns is that in states that have expanded Medicaid, more than 50 percent of new enrollees shifted from private commercial insurance to heavily taxpayer subsidized plans on the health exchanges.

“There is nothing about expansion that affects pregnant women [and] children,” Hise said.  “The outcomes on Medicaid are much lower than the health outcomes for individuals on private insurance. That’s consistent across multiple states.” Access to doctors and other medical providers is worse for Medicaid participants than the privately insured, he said.

Transferring coverage from private insurance to Medicaid will generate less revenue for rural hospitals and health care providers already struggling to keep their doors open, Hise said.

A day after Gov. Pat McCrory said the health budget he would present to the General Assembly includes a limited expansion of enrollment and services in a Medicaid system that is already growing, state Sen. Terry Van Duyn, D-Buncombe, said expansion under Obamacare was needed.

During the April 12 meeting of the Joint Legislative Oversight Committee on Health and Human Services, Van Duyn said at a recent public comment meeting on Medicaid reform she attended in Asheville, “one of the things that I heard over, and over, and over again, particularly from health care providers in my region, was the need for Medicaid expansion.”

“It is our strong intent to really listen to the people of North Carolina,” responded state Health and Human Services Secretary Rick Brajer. “It’s obviously an important conversation,” and will continue over the next year.

Later that day, state Rep. Nelson Dollar, R-Wake, said at a meeting of the Joint Legislative Oversight Committee on Medicaid and N.C. Health Choice that the state’s Medicaid rolls already are expanding.

Year-over-year comparisons show a 2.5 percent enrollment growth in the past year, or about 44,000 additional people as Medicaid recipients, Dollar said.

“I think that demonstrates an incredibly healthy,” and well-run program, Dollar said.