Without Medicaid expansion, no insurance for 500,000 in N.C.

jmurawski@newsobserver.com kgarloch@charlotteobserver.comOctober 12, 2013 

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Dee Baginski, 54, watches television Friday as she eats at Urban Ministries of Durham. Baginski lives in the shelter while she appeals a disability benefits denial. In North Carolina the “poorest of the poor” are not eligible for subsidies on the new online health insurance marketplace. And current Medicaid eligibility excludes them from coverage, too.

CHUCK LIDDY — cliddy@newsobserver.com Buy Photo

Editor's Note: This story incorrectly stated that the federal poverty level for a family of four is $45,960. The correct figure is $23,500.

The last time Dee Baginski worked was 2-1/2 years ago as a manager for Walmart. Then a car wreck and cancer diagnosis slammed the door on “a whole life in retail management.”

Now, at age 54 and two surgeries later, Baginski finds herself at an Urban Ministries of Durham homeless shelter – uninsured and applying for disability. Her former $28,000-a-year job today seems like an unattainable dream.

While Baginski’s reversal of fortune is beyond anyone’s control, the fate of her health care rests in the hands of North Carolina politicians. She is among a half-million state residents who would have been eligible for Medicaid in January had officials here opted to expand that government program for the poor and disabled.

Since North Carolina, like 25 other states, rejected Medicaid expansion earlier this year, many of the state’s poorest residents will go without insurance despite the national health insurance law that was intended to slash the number of uninsured Americans.

“I have to depend on charity,” Baginski said. “I have too much physical pain to work.”

The Affordable Care Act, commonly called Obamacare, requires almost all Americans to buy health insurance or pay a fine.

The law was designed to provide insurance for people who don’t get coverage through an employer. It created an online exchange where low- and middle-income earners can buy government-subsidized plans to offset insurance costs.

The law also called for the poorest of the uninsured to be covered by expanding Medicaid. The federal government promised to cover the full cost of the expansion for the first three years and at least 90 percent in later years.

But last year, when the U.S. Supreme Court upheld the constitutionality of the law, it also said that states couldn’t be forced to expand Medicaid. Every state in the Deep South except for Arkansas rejected the Medicaid expansion. Like North Carolina, most of those states are led by Republican governors who are philosophically opposed to the Affordable Care Act.

Because so many Southern states rejected Medicaid expansion, two-thirds of poor blacks and single mothers and more than half of low-wage workers who are currently uninsured in the United States are left without insurance, according to an analysis by The New York Times. The government will not penalize people for not having insurance if they could have been covered by Medicaid in states that aren’t accepting the expansion.

Adam Linker, a policy analyst at the North Carolina Health Access Coalition, a Raleigh nonprofit advocacy group, has been traveling the state and meeting many of those people who will fall through the cracks.

“They’re always very shocked that they won’t qualify for anything,” Linker said. “You’re going to have more and more people realizing that this was a state-level decision to deny them access to health insurance.”

Growing costs

Republican legislators in North Carolina and the Republican governor, Pat McCrory, agreed to reject the Medicaid expansion earlier this year, citing concern about the cost of offering Medicaid to a half-million more people.

North Carolina’s Medicaid program cost $14 billion last year. The state’s portion was $3 billion, and the federal government paid the rest.

McCrory also expressed concern about whether the federal government would pay its share of the cost to expand in light of the budget deficit, which has exceeded $1 trillion in each of the past four years.

Medicaid in North Carolina currently covers children under 18, some pregnant women, people with disabilities, select low-income parents and elderly poor.

For Baginski, the difference between charity care and Medicaid is the difference between limited doctors who provide pro bono work and a health care network that includes hospitals and mental health counselors. Her unpaid medical bills are up to $24,000, she said.

“I would have a regular doctor, and I could get medications,” Baginski said. “There’s a lot of medications I’m supposed to get, but there’s no way I can get them.”

Two leaders of the state House Health and Human Services Committee say it’s unlikely that North Carolina’s decision will be reversed.

Rep. Justin Burr, a Republican representing Montgomery and Stanly counties and co-chairman of the health care committee, said he’s “very skeptical about any future expansion.”

“So much of our state revenue has been eaten away by the Medicaid budget,” he said. “I certainly don’t think we need to expand an entitlement program.”

Rep. Nelson Dollar, a Republican from Cary and a vice chairman of the committee, said the current state Medicaid program, which has experienced cost overruns and chronic billing delays, needs to be fixed “before consideration can be given as to whether you add an additional 500,000 people to the system.”

He added that the people who would be covered under Medicaid expansion are “relatively healthy and not the ones in most need. If somebody has an emergency and they go to the emergency room, they will always get care.”

Linker, from the Health Access Coalition, countered that insurance companies have repeatedly found that the people who would be covered by the Medicaid expansion are less healthy than those with insurance. He said it’s a myth that “anyone can stroll into an emergency room and get free, comprehensive care.”

Hospitals are obligated to stabilize patients who are acutely ill or injured, he said, but they can also pursue patients for payment, which can wreak havoc on the finances of the uninsured.

“Expanding Medicaid boosts the bottom line for medical providers and ensures that people can seek appropriate care at the right place at the right time,” he said.

‘Too poor’ for subsidy

In North Carolina, about 1.5 million residents are uninsured, and about half of them are expected to qualify for insurance subsidies under the Affordable Care Act.

About half a million of the uninsured earn less than 100 percent of the poverty level – $11,490 for a single person and $23,500 for a family of four. They are not eligible for insurance subsidies, and therefore are not subject to a penalty for not buying health insurance. That’s because authors of the Affordable Care Act assumed this group would get benefits through the Medicaid expansion.

Mostly these people who earn too little to get subsidies are healthy adults without children. They are “literally too poor to be eligible,” said Madison Hardee, a lawyer with Legal Services of the Southern Piedmont.

Hospitals across North Carolina had embraced Medicaid expansion. It meant they would be reimbursed for treating poor people who are unable to pay hospital bills.

“This was integral to implementation of the Affordable Care Act,” said Joe Piemont, president and chief operating officer of Carolinas HealthCare System in Charlotte.

“These (uninsured) folks are here, and we’re taking care of them now, but it certainly would have been a benefit to have them qualify for the Medicaid expansion.”

The annual cost to North Carolina’s hospitals of not expanding Medicaid is estimated to be as much as $660 million, based on an analysis conducted for the N.C. Institute of Medicine by N.C. Division of Medical Assistance.

Citing the state’s decision to reject Medicaid expansion, Vidant Health System recently announced plans to close its 60-year-old community hospital in Belhaven, a Beaufort County town.

“Many of these institutions operate close to the margin,” Piemont said. “You just wonder how much they can absorb.”

Hospitals are hoping

Expanding Medicaid would have given more patients access to routine doctor visits, medicines and hospital care so they wouldn’t have to wait until problems develop into emergencies.

“We want people to have access to good, regular health care to help them stay healthy instead of having to treat them at the last minute,” said Bob Seehausen, senior vice president of Novant Health in Winston-Salem.

In the Triangle, hospital officials estimated the rejection of Medicaid expansion means about $85 million in forgone annual revenue for UNC Health Care, which would have represented a significant boost to the $334.5 million that the Chapel Hill-based system received from Medicaid in the 2012 fiscal year.

UNC Health Care includes Rex Healthcare in Raleigh, Chatham Hospital in Siler City, High Point Regional, Caldwell Memorial Hospital in Lenoir, Pardee Hospital in Hendersonville as well as UNC faculty and physicians.

Don Dalton, spokesman for the N.C. Hospital Association, said the group is “having some very intense discussions with our members” about how best to persuade state leaders to reverse their decision.

For the time being, though, North Carolinians such as Robin Richard will continue without insurance. The 51-year-old Durham resident has been unemployed since she left her Chick-fil-A job as a deli clerk because of a relapse of clinical depression.

A charity pays her monthly rent while she looks for another food service job, having past experience at Kroger and Waffle House. She has diabetes and hypertension and gets basic medical attention free from the Lincoln Community Health Center in Durham.

“I have to go wherever they accept me for free,” she said. “I do get some care, and it does help somewhat.”

She’s been homeless on and off for the past 12 years and doesn’t have frequent contact with her ex-husband and three daughters in Henderson.

If she had access to Medicaid, she said she would have reliable and continuous medical care.

“I’d basically see my psychiatrist on a regular basis,” she said. “That’s basically what I need.”

Murawski: 919-829-8932

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