Gov. Roy Cooper is not taking long to move forward on a key campaign pledge of expanding Medicaid coverage by nearly 500,000 North Carolinians.
Cooper said Wednesday during an economic forum in Durham that he will pursue expansion even though Republicans have super-majority control in both chambers and there is a state law prohibiting the executive branch from making such an attempt.
Medicaid expansion was a hot-button issue throughout Pat McCrory’s term as governor. Currently, Medicaid covers about 1.9 million North Carolinians, and is a $14 billion a year program.
Cooper plans to file an amendment by Friday that asks the federal government to amend the N.C. Medicaid reform waiver request submitted in June.
Cooper said he believes the law prohibiting the expansion of Medicaid in the state, approved in 2013, infringes on “core executive functions” of the governor’s role for negotiating the waiver request with the Centers for Medicaid and Medicare Services. McCrory said he was pursuing federal waiver exceptions for what he called “a North Carolina plan, and not a Washington plan” that could have featured expansion.
North Carolina is one of 19 states that have chosen not to expand their Medicaid program though the federal Affordable Care Act. The act provides resources for states to extend coverage to all non-elderly adults with incomes below 133 percent of the federal poverty level, currently $32,253 a year for a family of four and $18,000 for an individual.
A study released in 2016 by Harvard University found that as many as 1,145 people in North Carolina may die every year because Medicaid has not been expanded and they have no access to screenings and preventive care.
Cooper said expansion could result in the net gain of up to 40,000 jobs statewide, mostly in the health care sector.
A December 2014 study sponsored by the Cone Health Foundation and the Kate B. Reynolds Charitable Trust determined that the Triad and Northwest North Carolina could have 93,471 more people insured and 8,962 jobs created by 2020 if state leaders choose to expand the state’s Medicaid program.
A 2014 Robert Wood Johnson Foundation and Urban Institute study, a philanthropy that advocates for public health, found that North Carolina could lose as much as $51 billion in federal Medicaid payments over the next 10 years if its program is not expanded.
“Gov. Cooper believes expanding Medicaid will help grow jobs and our economy,” said his spokeswoman, Noelle Talley. “We fully expect input and cooperation from the legislature in this process and intend to comply with our state’s laws and the constitution.”
Republican legislative leaders have said consistently since 2013 that expansion is a nonstarter for them, primarily because they don’t trust the federal government to keep its pledge to pay more than 90 percent of the administrative costs. Expansion states must pick up 5 percent of the administrative costs in 2017 and 10 percent for 2020 and beyond.
North Carolina’s expansion prohibition prevents the N.C. Department of Health and Human Services and the N.C. Department of Insurance from making any attempt to expand the program through the ACA.
Still, McCrory had said he would consider expansion once the state’s Medicaid program “was fixed.”
State health officials reported a third consecutive Medicaid surplus in fiscal 2015-16, based primarily on less demand for services than projected and lower prescription drug costs. Some of the 2015-16 surplus was factored into the 2016-17 state budget.
N.C. Senate leader Phil Berger, R-Rockingham, said he considers Cooper’s proposal as his intention “to violate his oath of office with a brazenly illegal attempt to force a massive, budget-busting Obamacare expansion on North Carolina taxpayers.”
According to Berger, “Cooper is three strikes and out on his attempt to break state law: he does not have the authority to unilaterally expand Obamacare; his administration cannot take steps to increase Medicaid eligibility; and our constitution does not allow him to spend billions of state tax dollars we don’t have to expand Obamacare without legislative approval.”
On Thursday, Berger and House Speaker Tim Moore, R-Cleveland, sent a letter to CMS expressing its opposition to Cooper's amendment request and citing the state law for its reasoning in requesting rejection.
"We are disappointed by this news, as such action is clearly prohibited under state law," the lawmakers said. "We encourage CMS to decline the governor's illegal request for expansion."
In the letter, the legislative leaders cited a potential $600 million annual state funding commitment to Medicaid expansion.
Cooper said he will ask hospitals in North Carolina “to step up” and pay assessments to come up with as much as a 5 percent state match for expansion for 2017 through 2019.
The expansion fight may be part of Cooper’s strategy to take his 2017 agenda straight to a statewide audience. Cooper also mentioned his continued pursuit to fully repeal House Bill 2, better known as the “bathroom bill.”
“I think he figures it suits him politically to fight for expansion of Medicaid and feels that he can make the General Assembly look bad with the public,” said David Meyer, senior partner with Keystone Planning Group of Durham.
Mitch Kokai, a policy analyst with the John Locke Foundation, a conservative-leaning research group, said Medicaid expansion “has zero chance of support” among legislative leaders.
“It remains to be seen whether the new governor will be able to get away with this move,” Kokai said. “But it certainly bodes ill for future relations with the General Assembly.”
Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said Cooper “intends to attempt a vast progressive agenda that will allow him to paint the legislature as obstructionist’”
“I do not know if this will work well for him given how legislative redistricting favors conservatives in this state. It could also backfire on him,” Madjd-Sadjadi said.
Mark Hall, a law professor at Wake Forest University and a nationally renowned health-care expert, issued a report in January 2016 that examined the pros and cons of expanding Medicaid in North Carolina. Hall came down on the side of the viability of expansion despite potential risks.
“We should know more in a month, but Congress could get rid of exchanges but keep Medicaid expansion in some form or rework each piece in different ways,” Hall said.
“The latter is more likely,” he said. “If Congress gives states more flexibility in how to structure Medicaid, then expansion could well be politically feasible in North Carolina.”
State Rep. Donny Lambeth, R-Forsyth, said that “we need to understand the new federal options we will have in N.C. under the Trump administration, and then look at what makes the most sense.”
“North Carolina hospitals would receive $11 billion in funding over the next 10 years if Medicaid was expanded,” said a report from left-leaning N.C. Policy Watch. “That’s money that could literally help many rural hospitals stay open and operating.”
The N.C. Medical Society and N.C. Hospital Association signaled their support for Cooper’s proposal.
“Hospitals and health systems strongly support expanded insurance coverage, inclusive of Medicaid expansion, to provide essential health coverage for North Carolinians,” the hospital association said.
“Given the complexity of the issue and the process, we believe coverage expansion can only happen through a bipartisan, collaborative effort,” it said. “We are prepared to work with the governor, the General Assembly and our members of Congress to achieve this goal.”