Medicaid expansion is likely to increase the cost of healthcare for all North Carolinians, including those on the State Health Plan (SHP), according to state Treasurer Dale Folwell.
Piggybacking off of what he said on July’s “Ask Me Anything” Q&A with reporters, he said on this month’s call Tuesday that there is evidence from other states showing Medicaid expansion actually increases the cost of healthcare for self-funded plans like the SHP.
Last month, he said he was very concerned with a recent report that states Medicaid expansion will increase the cost of healthcare, including the State Health Plan (SHP).
“It could ultimately have an impact on not only its operating budgets from a year-to-year basis but also have an impact on our gigantic unfunded healthcare liability,” Folwell said.
He said on this month’s call that Medicaid expansion is a revenue answer, and the problem they’re facing with healthcare in North Carolina is a cost problem.
“It’s very difficult to have a revenue answer to a cost problem,” Folwell said. “We need to focus on lowering the cost of healthcare, not just for the state employees, but all citizens across North Carolina. You can’t have the ninth most populous state having one of the leading causes of bankruptcy are things associated with medical utilization, medical spending, and billing. And that’s my answer to the Medicaid expansion.”
Gov. Roy Cooper signed Medicaid expansion into law on March 27. Over 600,000 North Carolinians are projected to be eligible for Medicaid once the bill becomes law.
Folwell said last month that Medicaid expansion didn’t go far enough or fast enough in terms of repealing certificate of need (CON), which, he said, needs to be repealed immediately. CON laws require medical providers to buy special certificates in order to operate. They are intended to reduce competition by not allowing too many of certain types of providers in any given region.
“There are horror stories across the state of North Carolina of people who are trying to get MRI machines approved in areas where people have to drive 100 miles to get an MRI done,” he said. “This is really impacting people’s lives.”
The expansion bill repeals just two of the state’s 27 Certificate of Need laws: One on addiction and mental health beds and the second on replacing equipment up to $3 million, It also repeals two CON laws for only the 23 largest counties, two to three years after federal Healthcare Access and Stabilization Program (HASP) payments to the hospitals begin. North Carolina remains the fourth most CON-regulated state in the nation.
Medicaid expansion is contingent on the state budget becoming law. Votes are expected on the budget sometime this month. Democrats, like Cooper and NC House Democratic Leader Robert Reives, were calling for Medicaid to be voted on separately before the votes on the budget take place.
Folwell said he fears that Medicaid expansion will result in some kind of cross-subsidization by hospitals so that they shift more of their costs onto the state employees.
“The second thing I’d add to that is that we have a report out from a year or so ago that shows that these hospitals who get billions of dollars of local and state tax benefit aren’t even providing the charity care that they’re supposed to be offering,” he added. “So, when we talk about billing and all these other things, we’re talking about people who could be going into bankruptcy who should have never gotten a bill to start with.”
He noted that in that report, only Wake Med was doing a good job matching the charity care with the tax benefit they got at the time.
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