Rep. Donny Lambeth, author of the 2016 Republican legislative initiative on Medicaid reform, has introduced a bill that would expand the state program, but require “participant contributions.”

House Bill 662 was submitted late Thursday by Lambeth and three other Republican sponsors. It is titled “Carolina Cares.”

Lambeth, from Forsyth County and former president of N.C. Baptist Hospital, is one of the legislature’s leading health-care experts. He has a press conference on the bill set for 11 a.m. Tuesday at the General Assembly.

The intent of HB662 is “to address the needs of citizens of North Carolina committed to a healthy lifestyle who are ineligible for Medicaid due to their income levels, but who are otherwise unable to afford health insurance.”

Expansion supporters, as well as several academic studies, have determined that expanding Medicaid could benefit more than 500,000 North Carolinians — potentially raising total Medicaid recipients to 2.4 million.

Lambeth said the expansion initiative would work “more like an insurance product for those working who can pay a portion of the cost, and the benefits and coverage are built around preventive and wellness care.”

For example, participants must follow protocols for routine physicals and screenings to improve their health if they have conditions such as diabetes, overweight, etc.”

Rep. Josh Dobson, R-McDowell, and a bill sponsor, told The News & Observer of Raleigh that “I want to do whatever I can to increase access to care for rural areas of the state. I believe this bill will do that.”

The bill represents the first bona fide expansion attempt by Republican legislators even though many in the party seem to oppose any initiative.

For example, Senate leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, have sued Democratic Gov. Roy Cooper to prevent him from requesting Medicaid expansion with the federal Department of Health and Human Services.

Cooper wants to submit an amendment request to the federal Centers for Medicare and Medicaid Services, or CMS, that would affect a state Medicaid waiver request submitted June 1 by the administration of Cooper’s predecessor, Pat McCrory.

McCrory’s waiver request focused on creating a hybrid oversight solution involving for-profit insurers and not-for-profit health-care systems. It didn’t include an expansion of Medicaid in the state.

A federal judge has given the parties through mid-April to negotiate Cooper’s request.

The proposal

Participant contribution would consist of an annual premium, billed monthly, representing 2 percent of their household income. That element appears to be based on the Healthy Indiana Medicaid expansion plan established by former Gov. Mike Pence.

Participants must be employed or pursuing a job to qualify, a component that may draw criticism from some expansion supporters.

The bill includes several qualifying exemptions: individuals caring for a dependent minor child, adult disabled child or disabled parent; in active treatment for substance abuse; and determined to be medically frail.

The plan would be canceled for nonpayment after 60 days unless individuals are provided with a payment exemption such as: household income is below 50 percent of federal poverty guidelines; medical hardship; physical hardship; member of a federally recognized tribe; and a returning home military veteran actively pursuing a job.

Participants can re-enroll once they make good on owed payments.

HB662 would make a request of federal DHHS “to obtain approval … with the maximum federal financial participation possible.”

Prepaid plans developed by state DHHS officials would be required to be equivalent to the 2017 state Essential Health Benefits Benchmark plan or Blue Cross Blue Shield of N.C.’s Blue Options preferred provider organization.

“Once the prepaid health plans are in place, then this program and products will be rolled into the structure set up to take risk and manage the Medicaid program,” Lambeth said.


The bill warns that expansion will not be implemented without sustainable funding from federal and state funds and participant premiums.

Similar to the Medicaid expansion plan submitted by Cooper, HB662 would provide state funding through assessments, including those charged to hospitals.

“It is the intent of the General Assembly that all state funds needed for the Carolina Care program shall be generated through these assessments,” according to the bill.

The N.C. Medical Society and N.C. Hospital Association have signaled their support for Cooper’s proposal that would include not-for-profit health care systems helping to pay the state’s 5 percent match of Medicaid expansion administrative costs for 2017, 2018 and 2019.

“North Carolina hospitals would receive $11 billion in funding over the next 10 years if Medicaid was expanded,” a report from left-leaning N.C. Policy Watch said. “That’s money that could, literally, help many rural hospitals stay open and operating.”

“We appreciate Rep. Lambeth and his House colleagues for seeking an innovative solution to this critical issue and stand ready to work with the General Assembly and the Cooper administration to address the financial aspects of the plan,” NCHA spokesman Julie Henry said.

‘Several challenges’

Analysts and economists are mixed on whether the bill has a chance of advancing this session.

“This bill faces several challenges, in addition to the lack of enthusiasm in the Senate for Medicaid expansion,” said John Dinan, a political science professor at Wake Forest University.

“The ACA repeal effort isn’t completely dead, and if the repeal bill is revived (in Congress), it is likely to include a reduction in the federal share of costs for persons covered by Medicaid to well below the 90 percent federal match.

“As a result, many officials in the 19 non-expansion states will likely wait before proceeding with Medicaid-expansion decisions,” Dinan said.

Having Lambeth as the bill author, four Republican sponsors and the Indiana-like initiative give the proposed legislation a better chance of passing than any Democratic bill, said Mitch Kokai, a policy analyst with Libertarian think tank John Locke Foundation.

“Still, one suspects that plenty of conservative legislators will continue to raise concerns about Medicaid’s shoddy track record,” Kokai said. “They’ll also question this plan’s potential long-term impact on the state budget.”

Kokai said there’s a good chance that the premium requirement and other skin-in-the-game aspects of HB662 could be perceived as a negative by Democrats “who want new enrollees to get Medicaid coverage with no strings attached.”

“Without significant Democratic support, it’s not likely a Medicaid expansion could happen.”

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said he is optimistic about HB662 gaining enough support since it does not require state general revenue funds.

“I think there is a fairly high likelihood that this bill, or one substantially similar to it, will be passed by the state legislature unless the Republicans in Congress can successfully come up with an ACA replacement,” Madjd-Sadjadi said.

“It certainly will be seen as insufficient by Democrats and potentially by the governor.

“But I do not think that it will be vetoed as it does not have any obvious poison pill provisions that would be so unpalatable as to render it inferior to the status quo from the perspective of liberal legislators.”

Ciara Zachary, a policy analyst with the left-leaning Health Advocacy Project, also agreed that the actions by Republican-controlled legislatures in Georgia, Kansas, Nebraska and Virginia to create a state-specific expansion plans are giving N.C. lawmakers “space to close the gap … and call this bill a way for low-income income workers to ‘buy’ coverage.”

Zachary cautioned that the project and other consumer-advocacy groups “are concerned that the bill will create significant barriers to people obtaining and keeping coverage, especially since some reporting from Indiana does not show the best results regarding cost-sharing and premiums.”

“I hope the bill advances and that lawmakers are willing to work on ways to improve the bill to increase access to Medicaid and not create barriers.”

Still pending …

A federal judge issued a 60-day stay on the Cooper motion then gave the parties through mid-April to negotiate Cooper’s request.

However, late Friday, an assistant U.S. attorney general filed for dismissal of Berger and Moore’s lawsuit. The lawmakers have until Wednesday to reply.

The motion by Chad Readler argues that “a federal court cannot enjoin an executive agency from considering an un-submitted proposal on the grounds that the agency would be required to reject the proposal if it were ever submitted.”

“Yet, that is precisely what plaintiffs have asked this court to do. There are many deficiencies in plaintiffs’ case, but that is the fundamental flaw.

“Rather than allowing the Secretary of Health and Human Services to evaluate a proposed Medicaid state plan amendment once it is submitted, plaintiffs would have this court preemptively declare its view,” Readler said. “Plaintiffs lack standing to bring this premature case … and their complaint (must be) dismissed for lack of standing and failure to state a claim on which relief can be granted.”

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GOP proposal would expand Medicaid – Winston-Salem Journal