Upchurch: North Carolina at a Medicaid crossroads
Pundits, politicians and concerned citizens have weighed in on the potential expansion of Medicaid in North Carolina, as part of the Affordable Care Act (ACA) or Obamacare. I find it troubling, however, that many are not clear about how Medicaid currently works and how an expansion might be quite different.
At Senior PharmAssist, we primarily see Durham County seniors; however, we meet citizens regularly who struggle mightily to make ends meet but are not eligible for Medicaid. The current Medicaid program is for people with very limited incomes, however, it is not enough to just be poor. You have to be the right “category of person” and have virtually no cash reserves to qualify. Generally, only seniors 65 and older, people who are blind or are considered disabled by Social Security standards, pregnant women, and children are eligible for Medicaid in the Tarheel State at this time.
A senior who is old enough for Medicaid and has a monthly income below the federal poverty level ($958) still cannot qualify if she or he has saved more than $2,000 for his or her golden years. She or he would need to “spend down” her or his nest egg to receive Medicaid. And childless adults who are younger than 65 and do not qualify for social security disability cannot qualify for Medicaid at present – no matter how poor they are.
A major driver in Medicaid spending is paying for long-term care, which Medicare does not support. This line item accounted for 29.1 percent of the $10.9 billion Medicaid state budget in 2010, in part because it is much easier to qualify for Medicaid if you need skilled nursing than if you need assisted living or home-based services, which would support more independence at much lower cost.
Provisions that would have allowed workers to contribute to a long-term care benefit via payroll deductions, similar to how Medicare Part A and Social Security are funded, were stripped out of the ACA. Many states – including our own – are now applying to the Centers for Medicare and Medicaid Services (CMS) for demonstration support to better align funding streams with less expensive and more appropriate care.
In the meantime, our state leaders need to decide whether or not to expand Medicaid. One option is to create an expanded Medicaid program that provides preventive and treatment options without some of the wraparound services, such as long-term care, that many of the more frail Medicaid beneficiaries need. We can keep current Medicaid benefits and eligibility limits in place for traditional beneficiaries.
Expanded Medicaid would afford access to care for those with very limited incomes before they get too sick or, once they’re ill, that honors their need for care. At Senior PharmAssist, we receive calls from people of all ages who cannot afford their medications. A health benefit that includes prescription medications would be life-giving to many who currently don’t qualify for Medicaid.
On the other hand, if we do not expand Medicaid these individuals will be on the wrong end of a short stick. State residents with incomes below 100 percent of the federal poverty level (family of four earning roughly $23,550 a year) comprise roughly 28 percent of the uninsured in North Carolina. These individuals will not be eligible to obtain government subsidies to purchase coverage once the individual mandate takes effect in 2014. The subsidies to help purchase private health insurance via the health insurance marketplaces (or health benefits exchanges) are explicitly for people with incomes between 100 percent – 400 percent of the federal poverty level.
Going forward, hospitals and community health centers will receive decreasing payments for providing care to the un- and underinsured. This policy change is based on the assumption that the individual mandate to purchase insurance plus expanded Medicaid will furnish these institutions with enough paying customers to balance their budgets. Thus, Medicaid expansion is integral to the success of a healthcare system that focuses on the “triple aim” of healthcare quality, population health and cost-effectiveness.
Current Medicaid services in North Carolina are supported 65 percent federally and 35 percent by the state. Services furnished by expanded Medicaid would be 100 percent federally funded in 2014-2016, with 10 percent of the cost shifting to the state by 2020 and beyond. If we wait we lose healthcare jobs and send our federal tax dollars to pay for healthcare services for people with limited incomes in other states. We also signal to many fellow North Carolinians that they can use hospital emergency departments as their primary source of medical care; however, we can’t chip in to treat them earlier – unless they become permanently disabled.
The good news is that while states had to decide in February if they and/or the federal government would control their health benefits exchanges for 2014, the decision to expand Medicaid in 2014 can change at any time this year. Our elected officials need to reexamine the facts and chart a healthier course for the Old North State.
Gina Upchurch is executive director of Senior PharmAssist.