NC Senate committee moves to limit state role in federal health care reform

Senate panel says feds should set up, run new health exchange

relder@newsobserver.comJanuary 31, 2013 

Floyd McKissick

— The state Senate’s insurance committee wasted little time Thursday in approving a bill to block expansion of Medicaid to poor adults in North Carolina and to require the state to hand over all aspects of its new health insurance exchange to the federal government.

Senate Bill No. 4, also known as the No N.C. Exchange/No Medicaid Expansion law, is a response to the Affordable Care Act. Under the act, Medicaid coverage extended to residents not previously eligible would be funded entirely by the federal government for the first three years. In 2017, the federal portion would decrease to 95 percent , with the state covering the remaining 5 percent. The federal portion would continue to drop annually until reaching a low of 90 percent federal financing for 2020 and subsequent years.

“We all know we are going to be dictated to by the federal government, so if they want to do it, just let them do it,” said Sen. Tom Apodaca, a Republican from Hendersonville and one of three primary sponsors of Senate Bill No. 4.

A contentious discussion preceded a voice vote on the bill, which now is expected to move to the Senate floor for debate beginning Monday.

A vocal opponent of having the federal government run the exchange was Sen. Floyd McKissick, a Democrat from Durham. He argued that the state would be “better served with a state-run exchange.”

“Are we ready to relinquish that authority?” McKissick asked during Thursday’s committee meeting.

McKissick also asked to see information on how the bill would impact the state financially, but Apodaca brushed off the request.

“I know you don’t like this, but we are going to get out of this meeting,” he said, urging McKissick to cut short his comments.

Called to the podium to address the committee, Rose Vaughn Williams, attorney for the N.C. Department of Insurance, said she was happy to have the opportunity to speak, but said “the natural instinct is not to step in front of a moving train.”

A few minutes later, the committee voted to approve the bill.

Later Thursday, two dozen House and Senate Democrats held a news conference to complain about the committee meeting, which was expected to have included a hearing on the pros and cons of expanding Medicaid and of allowing the state to assume partial or even full responsibility for the exchange in future years. Although the state missed its deadline for declaring a state-run exchange in the program’s first year, options remain open for adjusting how the exchange would be run in future years.

Senate Minority Leader Martin Nesbitt of Asheville called the committee meeting “the worst I have seen.”

“I could not believe the interest groups were not allowed to speak,” Nesbitt said. “We didn’t hear from the doctors; we didn’t hear from the hospitals. This is going to have a severe economic impact on this state, especially rural communities.”

Work groups established by the N.C. Institute of Medicine spent months studying the issues and determined that a state-based exchange would be best, said Pam Silberman, president of the institute chartered by the legislature in 1983 to provide nonpartisan information to lawmakers.

“The groups felt like North Carolina would have a better understanding of our needs,” said Silberman, whose panel members included insurance agents, consumers, health care providers, and legal and policy experts.

“We recommended a state-based exchange, and expected the legislature to set one up, and that’s what Department of Insurance has been relying on.”

When the legislature failed to pass laws establishing a state-based exchange, the study groups began working toward a state-federal partnership, Silberman said.

But if the bill that sailed through the Senate Insurance Committee on Thursday becomes law, it will mean that a federally run program will be North Carolina’s only option.

Expanding Medicaid to uninsured, low-income adults is another proposal worth debating, said Nesbitt, who described the issue as important to “everyone in North Carolina,” where 500,000 people don’t have insurance.

The federal government has agreed to provide assistance to states expanding Medicaid, which proponents say will greatly relieve hospitals and physicians from expenses of uninsured patients.

The assistance would include a 100 percent federal match to state money spent for expanding the program during the first three years. The match would then decrease to 95 percent and, later, to 90 percent.

“We’re going to say ‘no’ to $20 billion from the federal government over 10 years,” Nesbitt said.

The state already has spent nearly all of the $13 million appropriated by the federal government to set up consumer assistance and quality assurance programs for the exchange.

A $73 million grant to fund electronic databases that would tie information from the program into the state’s health care system has not yet been spent, Silberman said.

Elder: 919-829-4528

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