North Carolina is on track to become the 40th state to expand Medicaid, potentially providing state-funded healthcare to over 600,000 more people.
The North Carolina General Assembly has debated the validity of a Medicaid expansion bill since 2019. On March 2, House Speaker Tim Moore and Senate Leader Phil Berger announced that an agreement between the Assembly’s two chambers was finally reached. On March 15, the North Carolina Senate passed House Bill 76, “Access to Health Care Options,” with a margin of 44-2. The bill, which expands Medicaid to all adults with incomes below 138% of the federal poverty level, now heads to the House for a concurrence vote where it is likely to pass.
Expanded Medicaid would enable the state to “bring in billions of dollars in federal funds to help stabilize rural hospitals and add to the state’s General Fund to address issues such as our growing mental health crisis,” wrote Cynthia Charles, vice president of communications and public relations at the North Carolina Healthcare Association, in a statement.
One of the largest motivators for North Carolina's expansion came from the American Rescue Plan, an economic stimulus bill signed by President Biden. Previously, the federal government had paid 90% of the costs for states to expand the program. Under the ARP’s new revisions, the federal government will pay 95% of the costs to newly expanded states.
The result was an elimination of “certificate of need” laws, which prevent healthcare providers from making changes to their facilities and equipment without permission from the Department of Health and Human Services, for behavioral health beds and chemical dependency beds. Replacement equipment and diagnostic center cost thresholds were also increased to $3 million, indexed to inflation.
Possible effects on Durham and Duke Health
Medicaid could expand healthcare access to underfunded groups within Durham, allowing greater access to services provided by Duke Health.
"Durham has big gaps in income level. Durham has minority underfunded groups in the area, in the county and Durham city itself," said Nathan Boucher, associate research professor in the Sanford School of Public Policy and associate professor of medicine. "[The state] stands to get about $1.8 billion Medicaid dollars coming from the federal government. So you know, there could be 500 to 600,000 more people in North Carolina being covered by Medicaid."
The bill is also predicted to benefit minority populations within the state. Within the poverty zone, there are “a number of groups of people of color, people with disabilities [and] older adults who are isolated and might qualify for Medicaid,” Boucher said.
"So I think with 1.8 billion flowing into the state…expansion from the PPACA, then you would have more confidence and try to reach out to folks to get them onto Medicaid. Otherwise, they're still going to be coming to your hospitals. They’re still going to be coming to Duke. But if they can’t get onto Medicaid, then there’s no piggy bank to bill their services against, so it ends up being care that we can’t bill for,” he said.
For Duke Health, the priority is different. Because Duke does not cover surrounding Durham communities, it will aim to ensure it maximizes the payments it receives from the Center for Medicare & Medicaid Services, according to Boucher.
“The relationship between the Duke Health System and the managed care plans is a really important one,” Boucher explained. "There's more money flowing, but it's flowing through three or four care management organizations for the state. [Duke Health] wants to make sure they're getting maximum payments for each one of the Medicaid patients that they're paying for.”
This may incentivize a greater subscription rate to Medicaid too, as its low reimbursement rates tend to decrease the plan's popularity, according to Boucher.
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