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The Showdown in North Carolina Over Medicaid Expansion

Even as Trump attacks Medicaid, 2020 might be the year for expansion in North Carolina.

Margie Storch became involved with healthcare reform during the Bill Clinton administration. In recent years, she has worked with Health Care Justice NC, advocating for expanding Medicaid in North Carolina — one of 14 states that have not expanded.


Last year, Storch experienced the cost of this lack of expansion.


“My brother-in-law died in January of ’19. He was a cook in a nursing home and we didn’t know he didn’t have health care,” Storch said. “He didn’t make enough money for Obamacare and he didn’t qualify for Medicaid.”


If he had been covered, Storch thinks he might have been able to get treatment earlier for the cancer that killed him.


Storch’s brother-in-law was one of almost 1 million North Carolinians who currently lack insurance. Medicaid provides federal funding for health insurance for low income people and children. After the passage of the Affordable Care Act in 2010, more federal funding was promised to states that raised the income cutoff for the program. North Carolina is one of the 14 states that still has not raised this cutoff, a decade after the law passed.

North Carolina is one of 14 states that has not expanded Medicaid under the Affordable Care Act.

Today North Carolina is in a showdown over Medicaid expansion. Democratic Gov. Roy Cooper proposed a two-year budget last year that would expand Medicaid coverage by raising the income eligibility from 42 percent of the federal poverty line to 138 percent. The Republican controlled state House and Senate passed a budget without the expansion, which Gov. Cooper then vetoed on June 28, 2019. The state remains without a formal budget almost a year later.


But the spread of COVID-19 – coupled with the softening of local Republicans’ opposition to expansion – may finally bring expansion to the state.


North Carolina has over 9,000 cases of COVID-19 and 342 deaths as of April 28, according to the state Department of Health and Human Services. The Department of Commerce reports 741,612 COVID-19 related unemployment claims between March 15 and April 27. Many have not only lost work, but also their employer-provided insurance, right when they may need it the most.


Meanwhile the 2020 election will bring the entire state legislature and governor up for election as the state deals with this crisis. Jesse Cross-Call, senior policy analyst at the D.C.-based Center on Budget and Policy Priorities — a progressive think tank in favor of expanding Medicaid in North Carolina — thinks this moment will highlight the need for the state government to break the gridlock.


“We’re going to be fighting this public health emergency, but also an economic emergency,” said Cross-Call. “I think it will be incredibly clear that Medicaid is incredibly important in both.”

*  *  *

The conversation about Medicaid expansion, one started 10 years ago as a result of the Affordable Care Act, may seem out of step with the current national focus, especially among Democrats, on single payer health care. This policy would expand Medicare, a popular federal program. 


In contrast, Medicaid is a means tested program — a safety net for those at the bottom, not a program almost everyone will use eventually. It is also funded by both the state and federal government. Because of this, the effectiveness of the Affordable Care Act relies in part on its popularity in 50 different state legislatures. These limits are part of why Medicare for All has become a rallying cry for many on the left.


Allowing states to choose whether to expand Medicaid has allowed North Carolina to stall for 10 years — but it also means that in the midst of the pandemic, the state legislature can take concrete action that would have an immediate impact on the most vulnerable residents, like Storch’s brother-in-law. 

North Carolina Gov. Roy Cooper during a press briefing on the COVID-19 crisis on April 28, 2020
North Carolina Gov. Roy Cooper during a press briefing on Tuesday. Cooper's efforts to expand Medicaid have been stymied by the Republican-controlled legislature. (Photo courtesy the NC Dept of Public Safety.)

Medicare for All does have some support — exit polls in North Carolina on Super Tuesday found Democrats backed a single payer plan 55 to 41 percent. But Medicaid expansion has majority support among all North Carolinians. In a February poll sponsored by WRAL-TV of Raleigh, expanding Medicaid was favored 57 to 30 percent — including 36 percent of Republicans and 76 percent of Democrats surveyed. An August 2019 poll from the conservative organization Civitas showed 31 percent of North Carolinians polled favored Medicare for All, but 57 percent supported Medicaid expansion. Some observers think support for Medicaid expansion may have even helped propel Gov. Cooper to victory.


States that chose to expand Medicaid receive federal funding for 90 percent of the increased cost. According to a study by the Center for Health Policy Research at the George Washington University, Gov. Cooper’s proposal would, by 2022, give coverage to 634,000 North Carolinians.


“We’re in one of the poorest regions of the country,” said Phillip Stephens, the county chairman of the Republican Party in Robeson County, which has one of the highest percentages of Medicaid recipients in the state. Stephens wants to know how Medicaid expansion would be paid for, but as someone who works in the medical field, including as a physician’s assistant, he sees the problems with rural health care.


“We can see both sides of the issue with a lot of clarity,” he said — the potential costs to the state and the benefits for a rural community like Robeson. 


 Not all Republicans agree. Jacqueline Esslinger, who serves as the secretary and treasurer of the Vance County Republican Party, said she opposes expansion and is worried about Medicaid running up government debt.


“I feel we do not need at this time to expand Medicaid,” she said. “It’s not going to make anything better for people who have insurance.”

*  *  *

While the Affordable Care Act could not force states to adopt Medicaid expansion under the Obama administration, the Trump administration has not been able to slow expansion. 


The administration has attacked Medicaid by trying to pressure states to change their programs, rather than through direct federal law. This is possible because states are allowed to waive regulations and adjust their Medicaid program within certain parameters, to experiment and, theoretically, find more innovative and efficient ways to deliver services.

“One of the unexpected things about the Trump presidency is that it has not slowed down acceptance of Medicaid expansion.”

The Trump administration cannot mandate changes in Medicaid funding, but it has encouraged states to use these waivers to move to block grants. This would distribute federal funds to states in set amounts, instead of open-ended matching grants.


How many states will attempt this model — and whether courts will allow it — remains to be seen. Other states have attempted to use these waivers to add work requirements to Medicaid. These have been struck down in several courts.


“One of the unexpected things about the Trump presidency is that it has not slowed down acceptance of Medicaid expansion,” Cross-Call said. “I think North Carolina is moving closer to expansion … than they were during the Obama presidency.”


This may be, in part, because the Affordable Care Act is less of a political flashpoint than it was during the Obama administration and has become settled law. It may also be because the declines in health care coverage that have occurred since the passage of the Act have hit nonexpansion states the hardest.


“Since Trump took office, there’s been a slight uptick in the uninsurance rate, and this has been most pronounced in states without Medicaid expansion,” Cross-Call said. “There’s been over 100 rural hospitals that have closed in this country over the last decade. Most of those have been in nonexpansion states.”


In 2014, Adam O’Neal, the Republican mayor of Belhaven — a small town in Beaufort County, N.C. — walked to Washington, D.C., to protest the closure of a local hospital and advocate for expansion. The hospital remained closed, but it was an early indication that Medicaid expansion might garner bipartisan support in North Carolina. 


“You have very conservative people running (rural hospitals) who say, we need this,” said Adam Searing, associate professor of the practice at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

Over 100 rural U.S. hospitals have closed in the last decade. Most were in states that did not expand Medicaid.

Christen Linke Young is a fellow with the USC-Brookings Schaeffer Initiative for Health Policy and former principal deputy secretary for the North Carolina Department of Health and Human Services. She thinks that at the federal level, Medicaid is an ideological issue. For county officials, it is a pragmatic one.


“The lower down you go into our political system, the more people are living with the daily reality of living without Medicaid,” she said. “The lower down you go, the more you see people struggle with the lack of resources.”

*  *  *

Last year, Republicans in the North Carolina House introduced a compromise bill — House Bill 655 — that would expand Medicaid but require people to pay two percent of their income in premiums. It also included a work requirement, much like those that nine other states have introduced. The bill was mostly sponsored by Republicans, but also by Democratic Rep. Yvonne Lewis Holley, a candidate for lieutenant governor.


Searing said prior court decisions blocking work requirements makes HB 655 “invalid on its face.”


 “It didn’t seem to me the Republicans were very serious about it,” he said. “It seemed like it was more of a fig leaf than an actual proposal.”


Linke Young was more optimistic, while noting the court challenges.


“I personally don’t think these kind of work reporting policies are good policy, but this nonetheless represents a serious effort towards Medicaid expansion,” she wrote in an email. 


HB 655 has not been put up to a full vote in the House or reached the State Senate. Whether it is a serious attempt to compromise or a fig leaf, the mostly Republican backers seem to believe that Medicaid expansion is worth exploring — and that it may be best to remove the issue from the table before November to avoid election-day losses.

*  *  *

As COVID-19 spreads, the limits of the system are clearer than ever.


“When you lose your job, you lose your insurance, and because there isn’t Medicaid expansion, there’s no safety net for half a million people,” Searing said. “Many of them will have nowhere to go.” 


100 Days in Appalachia, a nonprofit digital newsroom, has pointed to the risk of COVID-19 closing rural hospitals as they halt nonemergency procedures and take on new costs to prepare for the pandemic. The progressive Economic Policy Institute has called on states to do more to prepare, including expanding Medicaid. With the November election approaching and every state legislative seat open, the question will be whether Republicans are willing to compromise, either ahead of the election or afterwards.

“When you lose your job, you lose your insurance, and because there isn’t Medicaid expansion, there’s no safety net for half a million people.”

Chris Cooper, professor of Political Science and Public Affairs at Western Carolina University, is skeptical.


“Concerns are going to be high, but ability to make change is going to be even lower,” he said. “What we’re going to see [in November] is a referendum on who gets blamed for a lack of policy-making in [the state capital] Raleigh.” 


Regardless of the results, he thinks turnout over the state issue could impact how North Carolina goes in the presidential and senate race.


“Some of it could be projected to the federal level,” he said. 


Linke Young thinks that there could be a breakthrough even ahead of the election. 


“I’m not sure Republicans want to go through another election cycle being the party that is opposed to Medicaid,” she said. “Things seem impossible until it’s possible.”

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