House Speaker Tim Moore says there are discussions about Medicaid expansion
Medicaid will be making headlines in North Carolina this year on two fronts, and we want to help you understand what’s going on.
The two big changes — Medicaid expansion and Medicaid privatization — are not related. But they can be confusing because they both relate to Medicaid.
So here are the basics to help you follow the developments in the coming weeks and months.
Q: What is Medicaid?
A: Medicaid is a federal government health insurance program for low-income people. Most of the beneficiaries are children and minors, but beneficiaries also include pregnant women, elderly people who are blind and disabled, as well as people with developmental disabilities. Medicaid is administered by the N.C. Department of Health and Human Services and the feds cover about two-thirds of the $14.8 billion program costs.
Q: Who is behind the current push for Medicaid expansion?
A: Expansion has been an option under the Affordable Care Act, with the federal government covering 90 percent of the cost of covering the expanded population. Over the past few years, expansion has been rejected by the state’s Republican-led legislature. In 2017, however, several Republican lawmakers introduced a Medicaid expansion bill that would have required the beneficiaries to pay monthly premiums for their health insurance and also to hold down a job, to be searching for work or to be in a training or education program to develop job skills. These lawmakers plan to introduce their proposal this year, The N&O has reported.
Q: Who would qualify for Medicaid coverage if it were expanded?
A: Adults without dependent children whose household incomes are below 138 percent of the federal poverty level, or $16,753 for a single individual. The number of people who would qualify is estimated to be between 300,000 and 500,000, The N&O has reported. Currently Medicaid covers 2.1 million people in the state.
Q: What is Medicaid privatization?
A: Privatization will turn over day-to-day operations of the program, including the risk for cost overruns, to health insurance companies. In other words, the state will pay private insurers to provide Medicaid coverage to North Carolina residents. It will change the way health care services are paid for, from the state cutting checks for every medical service performed, to the state paying flat monthly fees to insurers for each person these companies insure, even if the beneficiaries never see a doctor. Privatization is intended to insurers an incentive to eliminate unnecessary procedures and other inefficiencies, and to keep patients healthy and to keep costs within budget. The change was approved by the state legislature in 2015 and is being implemented this year. On Monday, the N.C. Department of Health and Human Services announced the five health insurance organizations that were selected to run the program under contracts totaling $6 billion a year.
Q: What is the relationship between expansion and privatization?
A: The two are not related. The state could privatize without expanding, or expand without privatizing; it could do both, or do neither. If it does expand, the adults who qualify will be covered by the privatized version of Medicaid.
Q: How does privatization affect the cost of the program?
A: It is hoped that a new financial model of privatized Medicaid will hold down price increases for the state budget. For the individuals who depend on Medicaid for health coverage, their costs and benefits will remain the same, according to the N.C. Department of Health and Human Services.
Q: Since Medicaid has been privatized, when will people see changes?
A: This summer, beneficiaries (or their parents or guardians) will receive information about the health insurers that will provide Medicaid coverage where they live. The new program will start offering coverage in November for residents in the Triangle and some other counties. For most of the state, coverage under privatized Medicaid will begin in February 2020.
Glossary of terms
If you qualify for Medicaid under the expansion, you’ll be seeing some words that may be unfamiliar. Here’s a glossary to help you understand the lingo.
Capitation is a policy of paying health insurers flat monthly fees for each person they insure, regardless of the amount and level of care the patients receive, as opposed to paying for medical services each person gets regardless of the costs incurred. Under capitation, the state would pay insurers the same fee for a patient who requires no care in a given year as for a patient requiring intensive and repeated medical attention.
Case management is the practice of tracking patient care, especially chronically ill patients, to make sure they are taking their medications, getting checkups, seeing their doctor and taking other steps to stay healthy and reduce expenses. The practice involves sorting through reams of patient data and hiring nurses and social workers to help patients manage the system.
Enrollment brokers will play a role that’s similar to an insurance agent or a navigator. It’s a new service for Medicaid beneficiaries in North Carolina to help them select the best health insurance plan that meet their needs.
Fee-for-service is the traditional insurance business model in which insurers pay doctors and hospitals for medical services provided, no matter what the cost.
Manged care is the opposite of fee-for-service, this is a strategy to control health care costs by paying insurers flat monthly fees (capitation) for each patient they insure. It is meant to give insurers an incentive to manage their patients, prevent unnecessary expenses and cut costs.
Ombudsmans will advocate for beneficiaries to help resolve their grievances, complaints and other issues with the Medicaid system.
Primary care is the first level of care provided by a general family doctor, generally common ailments that don’t require specialized training.
Provider network is the doctors, labs, clinics and hospitals in your health insurance plan.
Specialty care is advanced medical care provided by an oncologist, cardiologist, orthopedist or other medical specialist. This is where your primary care doctor would refer you if he or she can’t provide care for your medical condition.
Telemedicine is the use of video links and other remote communications to connect doctors and patients who are not in the same physical location. Telemedicine will become a feature of privatized Medicaid to make sure that people in remote areas have access to health care providers.
Value-based payment is a business model for health care that uses flat fees and other incentives to hold health care providers accountable for the cost and the quality of patient care. It’s part of the managed care model in privatized Medicaid.