Written by James Coleman
With Medicaid transformation on the horizon, and Medicaid expansion a major issue of debate in the North Carolina General Assembly (NCGA), all things Medicaid have been hot topics among health care leaders, state policymakers, and affected consumers. With both happening at the same time, it is important to delineate their differences. Below is an overview of the debate concerning Medicaid expansion and a breakdown of what is going on with Medicaid transformation in North Carolina.
Since the passage of the Affordable Care Act in 2010, states have been given the option to expand coverage of Medicaid to low-income adults at or below 138% of the federal poverty level. So far, 36 states and the District of Columbia have expanded Medicaid coverage to low-income, working-age adults who would not have qualified for the program under previous Medicaid eligibility requirements.
North Carolina is among the 14 states that have not expanded Medicaid, with expansion being a hot button issue and a point of contentious debate in the NCGA.1 Opponents argue that expanding Medicaid would add to state budget deficits, reduce Medicaid payments to providers, and take away Medicaid resources from traditional enrollees such as children, pregnant women, and the elderly, to the benefit of able-bodied adults.2 Proponents argue that expanding Medicaid would offer medical coverage to 500,000 people who need it to receive medical treatment and medications, inject tax dollars back into the state, protect families from medical debt and bankruptcy, and create jobs.3 In the current legislative session of the NCGA, there has been a huge push by proponents for expansion.4 Perhaps the biggest supporter, Governor Roy Cooper, vetoed the most recent budget proposal from the NCGA because of its exclusion of Medicaid Expansion in June 2019.5 The stalemate over the state’s budget and Medicaid expansion is approaching the two-month mark, and the prospect of Medicaid expansion inclusion in the budget is up in the air. In addition to the governor’s efforts, bi-partisan proposed legislation to expand Medicaid is being considered by the NCGA. A comparison of both bills was covered in a previous NCIOM blog post.
In 2015, the NCGA enacted legislation (SL 2015-245 and SL 2016-121) directing the North Carolina Department of Health and Human Services (NCDHHS) to transform North Carolina’s Medicaid system from a fee-for-service payment system to a managed care system. The purpose of Medicaid transformation is to improve integration of services, improve care management, and to address unmet social needs that contribute to poor health.6 Through a managed care system, Medicaid eligibility requirements and provided services will remain the same and NCDHHS will continue to provide oversight for Medicaid and NC Health Choice programs. However, NCDHHS will now contract with statewide health care entities to manage prepaid health plans (PHPs) for the provision of health services for Medicaid enrollees. NCDHHS received federal approval from the Centers for Medicare a& Medicaid Services to transform Medicaid in October 2018, and an initial launch of managed care is planned for February 2020. 7–10
Below are the changes coming to North Carolina Medicaid with the transition to managed care:
For more information on Medicaid transformation, see the following previous blog posts:
What is it? https://nciom.org/what-is-medicaid-transformation/
What’s the context and what’s coming next? https://nciom.org/medicaid-transformation-about-to-kick-in-to-high-gear/
What does/will it look like? https://nciom.org/north-carolinas-medicaid-transformation-design/
Healthy opportunities pilots https://nciom.org/north-carolina-medicaid-healthy-opportunities-pilots/
Data and quality of care: https://nciom.org/using-data-to-promote-quality-of-care-under-medicaid-transformation/
Types of health plans: https://nciom.org/health-plans-under-medicaid-transformation/
What’s a PHP and why should we care? https://nciom.org/what-are-prepaid-health-plans/