- Each Republican-proposed Medicaid expansion – no matter the name – shares every major defining characteristic of the Democrat-proposed expansion plans.
- Work requirements, one of the major provisions of Republican plans, have been struck down in federal court in other states.
- HB655, or Carolina Cares 2.0, has the inherent flaws of a traditional Medicaid expansion and lawmakers should reject this expansion of the welfare state in North Carolina.
In April, a group of House Republicans filed House Bill 655, the “North Carolina Health Insurance for Working Families Act.” Representatives Donny Lambeth (Forsyth), Greg Murphy (Pitt), Josh Dobson (Avery), and Donna White (Johnston) are the bill’s primary sponsors.
Despite claims that the legislation would not be an expansion of the state’s Medicaid program, bill sponsors spent the majority of the bill’s announcement press conference defending Medicaid expansion. Changing the name of a program does not mask that the program expands Medicaid.
However, this is not a new ploy. The same group of primary sponsors was responsible for filing a similar proposal last year, known as “Carolina Cares.”
The major addition to this year’s version of Carolina Cares is the creation of a grant program that sends tax revenue to healthcare providers in rural areas. The bill also clarifies that the program will cease to exist if the federal match falls – a shallow promise, no doubt, since it would be politically impossible to revoke health insurance coverage once it is granted.
Besides these changes, HB 655 is just the same old song and dance from the last legislative session. Carolina Cares is a version of Medicaid expansion, and HB 655 is nothing more than Carolina Cares 2.0.
Like the Democrat-sponsored Medicaid expansion plan, Carolina Cares 2.0 would provide government health insurance to anyone below 133 percent of the federal poverty line who does not currently qualify for Medicaid. Unlike the Democrat proposals, Carolina Cares 2.0 coverage would require recipients to pay an annual premium, take prescribed “preventative care” measures, and meet work requirements.
Carolina Cares 2.0, like its predecessor, has every defining characteristic in common with traditional Medicaid expansion. To recap, both government-issued insurance program proposals:
- Provide identical insurance coverage.
- Carolina Cares 2.0 legislation directs DHHS to design a plan similar to the state’s current Medicaid Essential Health Benefits Benchmark Plan. This is the plan that is administered to current Medicaid recipients. In North Carolina, that plan is known as Blue Cross Blue Shield North Carolina Blue Options plans, a term specifically referenced in both Carolina Cares proposals.
- Carolina Cares 2.0 specifies that insurance “shall comply with applicable federal requirements governing Alternative Benefit Plans.” This suggests that the insurance product is or will essentially be treated as an Alternative Benefit Plan. According to the research group Health Management Associates, Alternative Benefit Plans are the type of plans offered under ACA Medicaid Expansion. This point is clearly demonstrated in the 2019 Medicaid expansion bill filed by legislative Democrats. Section 2(a) of House Bill 5 says that “beneficiaries eligible for the Medicaid program under this section shall receive benefits through an Alternative Benefit Plan that is established by the Department consistent with federal requirements”
- Receive the same federal funding.
- Carolina Cares 2.0 says, “federal law directs that the federal share for the North Carolina model 29 addressing the coverage gap is ninety percent (90%) for calendar year 2020 and each year.thereafter, under 42 U.S.C. § 1396d(y)(1)(E).”
- The referenced federal law governs expansion of state Medicaid programs under the Affordable Care Act.
- Are administered through the federal and state Medicaid program departments.
- Carolina Cares 2.0 requires the state Department of Health and Human Services (DHHS) to get approval for the program through a 1115 waiver. This refers to Section 1115 of the Social Security Act. According to the Kaiser Family Foundation, Section 1115 waivers are submitted by states to the federal government in order to, “waive provisions of major health and welfare programs authorized under the Act, including certain Medicaid requirements, and to allow a state to use federal Medicaid funds in ways that are not otherwise allowed under federal rules.”
- The federal government would have to approve Carolina Cares under a Section 1115 waiver, which is used to modify state Medicaid programs; the Democrat expansion proposal would not require a waiver, since it does not include work requirements.
- Whether through a waiver or the original avenue, both proposals would be an expansion of the state’s Medicaid program in the eyes of the federal government.
- Have the same negative consequences, including limiting access for those that need it most and putting the state’s finances in jeopardy.
Many proponents of Carolina Cares 2.0 hang their hat on the program’s work requirements as the distinguishing factor for their plan.
In a phenomenon known as the “welfare cliff,” individuals decide to work less hours or for lower pay in order to continue to meet income thresholds for government benefits. This is detrimental to taxpayers, who have to continue to support that person; to the economy, which misses out on that person’s unique contributions; and to the individual, who is stuck in poverty and forfeits the positive benefits of gainful employment.
Carolina Cares 2.0’s built-in work requirements will not remedy these shortcomings. First, the work requirements do not negate the income limits; while individuals may be required to work or volunteer, they still have a dis-incentive to work more hours or at better-paying positions that would allow them to actually escape poverty. This is even more troubling when you consider that working full time at minimum wage, a person with no dependent children would make too much income to qualify under expansion. Seventy-eight percent of those who would be newly eligible under expansion fall into that category.
Second, there is no guarantee the work requirements will be approved and upheld. The Trump administration has approved work requirements under state expansion proposals, but with the 2020 election around the corner, a different administration may not be as friendly towards the idea. Furthermore, state work requirements in Kentucky and Arkansas have been struck down by a federal court – pending appeal. North Carolina could find its own work requirements voided before the program is even implemented.
Even if the minor differences between Carolina Cares 2.0 and traditional Medicaid expansion are enough to convince you that it’s not Medicaid expansion, there is still a question that must be answered: Should the government be involved in providing insurance for able-bodied, working age adults? Anyone newly eligible for Medicaid under expansion would fall into that category, since people with disabilities and other vulnerable populations are already covered by the state’s Medicaid program.
The research for this piece was originally published in an analysis of the 2017 Carolina Cares proposal, the 2019 Carolina Cares 2.0 announcement, and an article on the health insurance coverage gap. To learn more about why Medicaid expansion is wrong for North Carolina, go to nccivitas.org/medex.