Health & Human Services

North Carolina Governor Leaving ‘Door Open’ to Medicaid Expansion

Republican Pat McCrory gave his strongest approval yet of the possibility of expansion, but two major obstacles stand in the way.
by | July 15, 2014
North Carolina Gov. Pat McCrory
“Once we fix the current system, I have not closed the door as governor," Gov. Pat McCrory told an NPR affiliate. David Kidd/Governing

North Carolina Gov. Pat McCrory said he’s “open” to Medicaid expansion to cover 500,000 low-income people in his state, but the first-term Republican also insisted on first getting together a plan to manage what have become yearly cost overruns in health care.

McCrory, who served as the mayor of Charlotte for 14 years, made his remarks during an interview with Charlotte’s NPR affiliate. While he’s never outright rejected expansion, his comments -- coming after a National Governors Association meeting during which he spoke with federal health officials -- are the strongest he’s yet made on the possibility of going forward.

“I’m leaving that door open,” McCrory said when asked if Medicaid expansion could happen eventually. “Once we fix the current system, I have not closed the door as governor.”

McCrory went on to describe a meeting between new Health and Human Services Secretary Sylvia Mathews Burwell and a number of governors, both Democrats and Republicans, in which they discussed crafting state-specific proposals for Medicaid expansion.

“What we’re trying to figure out is how can we get more waivers to adapt to what North Carolina needs,” he said. “Can we do it in a strategic way instead of across the board, do a better definition -- if we do expand it -- and get more assurance of what our true costs will be three or four years down the road, regardless of who the governor will be?”

A number of Republican governors have successfully pitched plans that effectively privatized the expansion for childless adults and included premiums or greater cost-sharing for some income groups. Others, including Indiana and Pennsylvania, have sought work requirements in their waiver plans. Next year will be the second of three years in which the federal government will pay 100 percent of the costs of expanding the program for low-income people, before phasing down support toward 90 percent in 2017.

Twenty-six states, including four with Republican governors and legislatures, have expanded Medicaid under the Affordable Care Act. Only Arkansas has expanded the program in the South.

North Carolina runs a fee-for-service Medicaid model but with help from an award-winning non-profit group called Community Care of North Carolina, which helps coordinate care through its network of providers and other health care workers. But the system has faced administrative inefficiencies that have contributed to cost overruns in the hundreds of millions of dollars over the past several years.

Last year, McCrory proposed shifting to a system, known as capitation, that would allow the state to pay an outside entity a set amount per patient each month and force that organization to assume financial risk for spending over the per-member allowance. Many states already serve most of their Medicaid patients under this type of arrangement, and the practice is expected to account for 75 percent of all recipients by 2015, by one estimate.

That plan didn’t go over as well with some policy analysts and medical groups. This year, McCrory and the state House embraced a plan that would gradually shift toward capitation but within a “provider-led” structure of groups that would band together to cover a whole population. The Senate, which is also controlled by Republicans, wants a more rapid shift to traditional managed care, with an outside insurer managing the tasks that the state health department currently handles.

Passing Medicaid expansion would require the GOP-controlled legislature to go back on a 2013 bill that stated its intention to “reject” expansion but left future decisions about expansion up to the legislature. With veto-proof majorities, it’s unlikely the legislature will reverse itself in the near future. Legislative leaders have given no indication they've changed their minds on Medicaid expansion.

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