The North Carolina General Assembly has passed a bill that will expand Medicaid and increase healthcare competition. It is on its way to the Governor to be signed into law.
The law will mean good things for the state, and the elected leaders who worked hard to make this happen deserve thanks.
Both policies, and especially Medicaid expansion, have been the subject of political controversy for several years.
Since this will soon be law, let’s put those arguments aside and talk about what the new law will mean to North Carolina’s healthcare consumers.
The passage of Medicaid expansion means that roughly 500,000 North Carolinians will be eligible for insurance coverage.
Who are these 500,000 people?
Mostly working poor individuals who did not qualify for Medicaid and did not earn enough to qualify for federal subsides to buy health insurance through the marketplace.
With few exceptions, in North Carolina, Medicaid coverage has only been available to only children, pregnant women, or individuals with disabilities.
At the same time, to qualify for subsidies to help buy health insurance on the marketplace you had to earn at least 100 percent of the federal poverty level. Or roughly $13,500 in 2022.
That means if you made less than $13,500 and did not fall into a category that qualified for Medicaid, you had no affordable options for health insurance.
A study found that in North Carolina, most who fall into the gap are individuals working in difficult, lower paying jobs like hospitality, retail and construction.
“The most common jobs,” the report finds, “for low-wage, uninsured workers in North Carolina are cashiers, cooks, freight and stock laborers, waiters/waitresses, and nursing assistants.”
The new expansion law will provide individuals making up to 133 percent of the federal poverty level with access to Medicaid coverage. That is about $18,000 in 2022.
Those making over $18,000 will qualify for federal subsidies to buy insurance through the marketplace.
What does this mean for consumers who already have coverage?
Lower costs in the long run. Here’s how.
Individuals who are currently uninsured still get sick. When they get sick, they go to high-cost settings like the emergency room. They get care they cannot afford. Those costs are passed onto insured individuals through higher healthcare costs. Those higher costs are reflected in their insurance premiums and cost shares.
Now that these previously uninsured individuals will have coverage, the burden on businesses and workers to subsidize uncompensated care will be greatly reduced, and thus will drive down costs.
Certificate of Need laws mandate that if someone wants to open a new healthcare facility in a given area, they must first prove to the government there is a “need” for that facility.
These outdated mandates where initially put in place to control things like unnecessary hospital expansions, but in reality, they have hindered competition and innovation.
Among other CON reforms, the bill passed by the General Assembly repeals CON for behavioral health beds, chemical dependency beds, and ambulatory surgical centers (ASCs).
Repealing CON for behavioral health and chemical dependency will open the door for new, innovative services and better care.
Repealing CON laws for ASCs will allow these facilities to offer more affordable care to patients. It will also increase competition and place downward pressure on hospital prices.
ASCs provide many of the same services as large, fully equipped hospitals, but at a much lower cost. Until now, however, CON laws have prevented ASCs from opening because the hospital system already holds the CON.
Is this law good for North Carolina?
Medicaid expansion will provide insurance coverage for the working poor and help lower healthcare system costs for everyone.
CON reform means better care and more competition. Which in turn means lower costs and higher quality.
We commend the elected leaders who worked hard to get this bill over the finish line.