Organizers of a forum last Thursday said they hope state leaders will reverse their decision not to expand Medicaid coverage, which, according to one estimate, would have given about 110,000 more Western North Carolinians access to the health program.
They also are hoping to tap into the interest of the nearly 70 people who attended the forum to help convince state legislators to expand Medicaid coverage next year.
The Western North Carolina AIDS Project and several other health-care advocacy groups sponsored the forum, held at UNC Asheville. Organizers presented an overview of the benefits of Medicaid expansion and the insurance marketplace that will go into effect on Jan. 1, 2014.
Enrollment for the insurance marketplace begins Oct. 1. Individuals without adequate, affordable health insurance can apply. Even if someone has coverage through their employer, they can still opt out of that plan if it doesn’t cover at least 60 percent of health-care costs and if premiums are more than 9.5 percent of their household income, explained Allison Rice, an attorney at Duke Law School.
On March 6, Gov. Pat McCrory signed Senate Bill 4. The bill rejects a state-based insurance exchange and blocks Medicaid expansion in North Carolina. Hendersonville Republican Sen. Tom Apodaca was one of the bill’s primary sponsors.
“In my first eight weeks as governor I’ve had to make some difficult decisions,” McCrory said in a statement after signing the bill. “My team conducted a thorough review of the Affordable Care Act and its impact on North Carolina. Before considering Medicaid expansion, we must reform the current system to make sure people currently enrolled receive the services they need and more taxpayer dollars are not put at risk.”
A ruling by the U.S. Supreme Court allows states to opt out of the portion of the Affordable Care Act that expands Medicaid coverage. By opting out, North Carolina will lose $23 million in federal dollars for assistance through health clinics.
While North Carolinians will still have access to the insurance exchange through the federal government, forum organizers said the expansion would have provided Medicaid benefits to an additional 500,000 people statewide.
Dr. Shannon Dowler, family physician and chief medical officer for Blue Ridge Community Health Services, said there was not enough time to convince the governor and legislators that opting out was not in the best interest of the people who need the coverage.
“This train was coming out of the station and there was no way to stop it,” Dowler said.
Under the new health care law, the federal government will give a state more money if it covers everyone who is not on Medicare and who has an income below 138 percent of the federal poverty level. In 2013, that’s $15,856 for an individual or $26,951 for a family of three.
The federal government will pick up 100 percent of the extra costs a state incurs to expand its program. That will begin phasing down in 2017 and level off at 90 percent in 2020.
Americans for Prosperity – North Carolina praised McCrory for his decision.
“Unlike some other state executives, McCrory ignored the siren call of ‘free’ federal money and recognized the problems with expanding Medicaid and creating a state health care exchange in North Carolina,” AFP-NC State Director Dallas Woodhouse said in a prepared statement.
Frequently, people without access to affordable insurance end up in hospital emergency rooms. Hospitals receive federal reimbursement dollars for providing those services. However, under the Affordable Care Act, those reimbursements will be cut drastically in 2014 because an expanded Medicaid would insure many of those individuals.
That creates a double-edged sword for North Carolinians. Not only could those people not be covered by Medicaid, but hospitals and health clinics will not receive federal dollars to continue providing health care to those individuals.
The Internet site for the insurance marketplace, which will be announced prior to the open enrollment date in October, will verify income and determine eligibility for the insurance marketplace, and at what level, if any, individuals can receive federal subsidies.
Rice gave two examples of how the subsidy could work. One was for a woman earning $16,433 at 149 percent of the federal poverty level. She would pay $57 of the $475 monthly premium for insurance, with the government paying $419. The other example was for a man earning $34,470 at 300 percent of the poverty level. He would pay $273 of the $475 premium, with the government paying $202.
The tax penalty for not obtaining health insurance is $95 per person the first year and $395 the second year, with the penalty increasing up to $700 for subsequent years.
There are currently about 1.5 million people uninsured in North Carolina, Dowler said. States that have opted out of the Medicaid expansion are going to be hit really hard, she said.
“Twenty percent of the people in Western North Carolina have no form of health insurance,” Dowler said. “About 110,000 people in Western North Carolina would have qualified for Medicaid through the expansion.”
“Rural communities will be impacted the most,” she added. Larger hospitals in the larger cities have a better payor mix than rural areas where the poverty level and unemployment rates are higher, she explained.
Mission Health estimates it will have to impose $250 million in cuts over the next 10 years to make up for the loss in federal reimbursements, which will drop drastically in 2016, Dowler said.
“Given the unprecedented decisions made by legislators in Raleigh to deny Medicaid expansion, these medical costs will certainly be carried by hospital emergency departments and paying patients through higher premiums,” said James M. Kirby, president and CEO of Pardee Hospital. “Pardee expects to lose an estimated $4 to $6 million of new revenue annually as the result of the state legislature’s rejection of Medicaid expansion.
“Pardee delivered $10.1 million worth of uncompensated or free care to indigent patients in 2011 alone. Had Medicaid been expanded to cover unreimbursed care, Pardee would have received roughly half of that back. Pardee continues to improve financially as an organization, however there is clearly a storm on the horizon.”
Advocates still say they can sway state leaders to make a different decision.
“We’re going around the state, telling people what the decision was, who voted to reject the money and what the consequences are, that a lot of people won’t be getting health care on Jan. 1 because of the rejection of federal money,” said Adam Searing, director of the Health Access Coalition for the North Carolina Justice Center.
“This is a winnable fight,” he said. “We can do it and we will do it. It may not happen this year, but it will happen next year.”
More information on the Affordable Care Act and the insurance marketplace is available at www.health.gov.