by Jordan Roberts
Former Director of Government Affairs, John Locke Foundation
The new NCGA session will be a busy one for the North Carolina Healthcare Association, the industry group that represents hospitals. On one front they are fighting the Treasurer’s proposal to change the method in which the State Health Plan pays for health claims. On another front, they have been advocating for the state to expand Medicaid.
The hospitals say if either the Treasurer’s implements his proposal or if the state doesn’t expand Medicaid, hospitals face a risk of having to offer fewer services or even close down. However, the following section from an article in NC Health News should raise some questions about the nature of Medicaid Expansion in North Carolina:
Altman says part of the problem that hospitals face has been created by legislative inaction in another area: Medicaid.
After the Affordable Care Act was passed, many states expanded their Medicaid programs to cover a wider swath of low-income residents. But the North Carolina General Assembly didn’t. Plus, in North Carolina, Medicaid is relatively stingy — paying hospitals and other providers significantly less than what it costs to actually deliver care.
Cone Health, for example, earned about $209 million in revenues from Medicaid for the fiscal year ending September 30, 2018, but it still lost about $62 million on those services, according to spokesman Doug Allred.
Between low Medicaid payments and the lack of Medicaid expansion, Altman says, hospitals end up treating more uninsured patients, who frequently can’t pay for the cost of their care. So employer-based health plans make up the difference.
“They then turn around and charge the privately insured substantially — substantially — more than the cost,” he said.
And in North Carolina, the biggest employer-based health plan is the state’s.
North Carolina hospitals are losing money on Medicaid patients, $62 million just at Cone Health. Even so, they want the state to expand Medicaid and load potentially 500,000 more patients on to the rolls. Also, they are willing to pay a tax to the state to receive this public money from the federal government? Something doesn’t add up here.