Raleigh, N.C. — North Carolina would not expand its Medicaid health insurance program for the poor under a bill that cleared the House Health Committee 16-7 Tuesday morning.
The bill, which has already passed the Senate and has the backing of Gov. Pat McCrory, is due to be on the House floor Wednesday. After clearing the House, the bill will have to return to the Senate for a final vote before heading to McCrory, a Republican, for his signature.
"We need to make sure we managed the current Medicaid program in place and get our current House in order before we think about changes," Rep. Justin Burr, R-Stanly, told the committee.
The measure gathered unusually high-profile attention. Budget Director Art Pope was in the room to watch the vote, and Carol Steckle, the head of the state's Medicaid program, was there to answer questions for lawmakers. House Speaker Thom Tillis and Majority Whip Mike Hager were also on hand.
Committee members voted down two amendments offered by Rep. Verla Insko, D-Orange, that would have allowed the state more flexibility in working with the Affordable Care Act.
The only changes made to the original Senate bill ensure that the state can continue to draw down federal funding for the NC FAST system, a computer system that will channel people to benefit programs such as Medicaid.
Republicans control both the House and Senate and have been widely critical of the Affordable Care Act, sometimes called Obamacare. The bill that cleared the committee Tuesday, Senate Bill 4, pushes back against two key provisions of the federal law.
Under the state bill, North Carolina would not participate in creating federal health exchanges, programs that allow uninsured people to find coverage. The state could have opted to help run the exchange or run it entirely. Instead, the federal government will run a health exchange here.
"It's an illusion to say the state will have any say," Burr said, arguing that federal rules would box in the state.
Insko and other Democrats argued it would be better for the state to have some control and for people based in North Carolina to answer questions and settle disputes.
Rep. Nathan Baskerville, D-Vance, observed that many committee members were critical of the federal government.
"If the problem is the federal government, why are we abdicating the authority to them," Baskerville asked.
One amendment that Insko offered would have allowed the state Department of Insurance to help settle disputes that arise from the new health insurance programs. Burr and other Republicans turned that back, saying only that the language in Insko's amendment wasn't right but they would work on the problem.
A second Insko amendment would have accepted the expansion of Medicaid for three years, a time period during which the federal government would pick up the cost.
Under current Medicaid rules, people at 100 percent of the federal poverty threshold qualify for the program. If the state expanded the program, those at 133 percent of the federal poverty rate would be eligible for health coverage. That would add some 500,000 people to the state's Medicaid program.
Insko's amendment would sunset after three years, reducing eligibility back to 100 percent of poverty if the federal government did not keep funding the expansion.
"We're going to throw them off the boat at that time?" asked Rep. Marilyn Avila, R-Wake.
Insko said "there is good reason" to think that the federal government would keep up the payments.
But Rep. Nelson Dollar, R-Wake, argued Insko's idea was "unworkable" and that the state wasn't ready to expand Medicaid, saying the North Carolina needed to repair the system as it exists. And, he said, the state could revisit the decision.
"It's not a decision for all time," Dollar said.
Both of Insko's amendments failed 14-7 along mostly party-line votes, with Democrat William Brisson crossing party lines to vote against both. Brisson also voted with Republicans to send the bill to the House floor.
Although their side prevailed, at least two Republicans expressed some uneasiness with the bill.
Rep. Jim Fulghum, a physician, said he had hoped to slow down the bill in order to better explore how to cover more people. However, he said, he sympathized with colleagues who read recent audits of the Medicaid program and saw hundreds of millions of dollars worth of mismanagement.
"People we're trying to help aren't getting help," said Fulghum, R-Wake, explaining his vote to send the bill to the House floor.
Rep. David Lewis, R-Harnett, also voted for the bill but raised a question about its impact on rural hospitals.
As part of the Affordable Care Act, the federal government will cut "disproportionate share" or DISH payments to hospitals. Those payments help hospitals covered the uninsured. One of the assumptions made by federal lawmakers is that states would expand Medicaid, therefore reducing the need for DISH funding.
"If you don't expand Medicaid, you're going to take away the only small percent of compensation we're paying now," Lewis said. Health advocates have openly worried that small rural hospitals, which rely heavily on DISH payments, may not be able to survive without them.
Steckle said the state Medicaid office was aware of the issue,but said federal regulators haven't written the rules for DISH reductions. She said it was likely DISH reductions would be tied to reductions in the numbers of uninsured.