How to think about North Carolina’s emerging Medicaid plan

The key thing to remember about Medicaid is that it is not one program, but disparate groups of people with different medical needs, but who all have incomes below a given line. The figure below illustrates nicely:

Gov McCrory announced the outline of a plan (I can find not written text) that he calls Partnership for a Healthy North Carolina. He intends to seek a 1115 Medicaid waiver, and to move toward ‘3ish’ (his words) ‘entities’ that will be responsible for coordinating all the care of Medicaid beneficiaries,  and that will competitively bid for the right to provide beneficiary care on an ‘at risk’ basis for those in Medicaid. This would mean any cost overruns not covered by the premiums these ‘entities’ receive will result in financial losses for the ‘entity’. Lots could be said, but I want to focus on who is covered by Medicaid and quick thoughts I have about those groups being in such a system.

  • Elderly, which are the so-called dual eligibles. This group is among the most expensive parts of the Medicaid program (per capita costs in N.C. about $10,600/year v. $2,800/year for children). Lots of the cost is Nursing Home expenses. Will the entities competitively bid for daily NH payments? If yes, will they be allowed to consider assisted living? If yes to either of these, this is a huge change. Medicaid has long set the floor payment for a NH bed, and if entities are aggressively bidding for beds this will be quite dislocating to the NH market in N.C. (for good and bad, most likely). If this group (duals) is not included, then it doesn’t address one of the most expensive groups of Medicaid beneficiaries
  • Disabled. This is a disparate group of folks; everything from spinal cord injury to someone born with profound intellectual disability. The per capita cost in N.C. of this group is around $16,000, the most expensive group. Both the elderly and disabled definitely suffer from silos of care and lack of coordination that the Governor noted, the fixing of which he said was a key part of his proposal. Sadly, it is not just the Medicaid program that has these troubles; our entire system is fragmented and overly focused on acute care at the expense of long term care.
  • If you look at the groups of adults, you see that you must have very low income to quality for Medicaid now, and childless adults can never qualify (pregnant women are the main persons producing the adults per capita cost of $4,100 in this post). Adults are the groups that would mostly benefit from the Medicaid expansion that is available via the ACA. Not to belabor the obvious, but since childless adults with low income only (eg not disabled) can never be covered by Medicaid now, the care of this group is not the source of the problem discussed by Gov. McCrory today. Much of the populations that would be covered by an expansion will not be the complicated cases that suffer from the lack of coordination issues Governor McCrory decried today.
  • Big picture, the announcement today focused on the real coordination problems of persons with complicated illness, especially those requiring both acute and long term care services and those joining medical and mental health problems. A new model or approach here could be quite beneficial to patients and the state. Politically, it will allow the Governor to say he has ‘fixed’ or is ‘fixing’ the broken Medicaid system allowing the state to move toward a Medicaid expansion along the ‘private option’ being discussed in Arkansas and other places. My guess is that this happens sooner rather than later, with lots of whispers of the expansion coming after the 2014 Republican primary. The most telling sign that it is only a matter of time on the expansion are the very powerful interests who want the Medicaid expansion, and yet are saying almost nothing publicly about it not being done at this point.
  • The details to the new plan are key, and at this point are non existent. Also, imagine if a liberal Gov got up and said ‘3ish entities’ will revolutionize health care via (fill in the blank) and didn’t even have a written fact sheet? This shows how little it takes for a Republican Governor to be given the benefit of the doubt on moving ahead on health reform.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to How to think about North Carolina’s emerging Medicaid plan

  1. Pingback: N.C. Medicaid Reform: Dual Eligibles and what is broken | freeforall

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