Politics & Government

NC small business health act becomes law, but without governor’s signature

This story was corrected at 7:25 p.m. Aug. 25 to reflect the pre-existing coverage.

N.C. Gov. Roy Cooper let the Small Business Health Care Act become law on Sunday without his signature.

The Small Business Health Care Act allows association health care plans, which are plans for small businesses, trade associations and others that are cheaper than Affordable Care Act plans. The ACA plan requires coverage of pre-existing conditions. But under the Small Business Health Care Act, some people could end up with less coverage for some of their pre-existing conditions, The News & Observer previously reported.

While the bill does not remove health care coverage from people with pre-existing conditions, a News & Observer fact check included experts pointing out that insurers aren’t required to offer association health plans with a full range of services for people with pre-existing conditions.

Cooper didn’t veto the bill, but he didn’t sign it either.

He released this statement on Sunday: “People have a right to be frustrated with the cost of private health insurance plans, but even though there is significant bipartisan support for this legislation, my concerns about the legality of these cheaper plans and their potential negative effects on health care prevent me from signing the bill.”

“These plans, if they survive legal challenge, can take us back to a time when people can be discriminated against for pre-existing conditions in addition to driving up health care costs for everyone else,” the governor stated. “A proven and effective way most other states have used to drive down the cost of private health insurance has been to accept the billions of federal dollars to expand Medicaid. We must find a bipartisan way to do this too.”

Senate Bill 86 had passed both General Assembly chambers and was sent to the governor on Aug. 15. It was sponsored by Sen. Dan Bishop, a Republican candidate for Congress in the Charlotte area.

On Sunday, Pat Ryan, spokesperson for Senate leader Phil Berger, said association health plans are required to cover pre-existing conditions, maternity care, newborn care, preventive health and other items. The act includes the same coverage requirements that already exist for large companies and corporations, he said.

The president of NC REALTORS issued a statement Sunday night thanking General Assembly members and the governor for allowing it to become law.

“Through this action, small businesses and independent contractors will now have an option for quality, affordable health insurance through Association Health Plans. This bipartisan legislation focuses on ensuring that hard-working citizens throughout our state are not allowed to fall into a gap which can’t be addressed in other programs,” Asa Fleming said.

“We look forward to working with our members to develop plans which address their needs and help provide coverage for the more than 6,000 who are uninsured and many more who are underinsured,” Fleming said.

Medicaid expansion and the budget

Medicaid expansion has been at the center of the state budget standoff, which has dragged on almost two months into the new fiscal year.

Cooper wants Medicaid expansion part of budget negotiations, while the Republican-controlled General Assembly does not.

Berger has repeatedly called Cooper’s budget veto a “Medicaid-or-nothing ultimatum.” Cooper has said there isn’t an ultimatum, but wants Medicaid expansion as part of budget negotiations.

Meanwhile, an override veto has been on the House calendar since early July, but House Speaker Tim Moore has yet to call for a vote. A super-majority is needed to override the governor’s veto, so that means at least seven Democrats in the House and one in the Senate are needed to vote with all Republicans for it.

Berger said last week that Republican lawmakers would start “freeing some of the hostages” in the budget, meaning bills that would pass some elements of the budget. Moore said state employees raises, which are on hold during the budget impasse, would appear in legislation this week.

Reporter Paul A. Specht contributed to this story.

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Dawn Baumgartner Vaughan covers North Carolina state government and politics at The News & Observer. She previously covered Durham for 13 years, and has received six North Carolina Press Association awards, including a 2018 award for investigative reporting.