Expansion of Medicaid in North Carolina had long been a topic of debate by the state’s politicians, policymakers, and advocacy groups. As noted above, an agreement was finally reached in 2023, and Medicaid expansion took effect in North Carolina in December 2023. But this was a decade in the making:
Expansion discussion during McCrory administration
Former Governor McCrory said that he was open to the idea of Medicaid expansion, but onlyafterthey “fix the current system.” This was a reference to the legislature’s Medicaid reform efforts, primarily aimed at transitioning to Medicaid managed care. McCrory made it clear that he would want some sort of work requirement tied to Medicaid eligibility for able-bodied adults, but at that point, no states had successfully petitioned the Obama administration to allow a work requirement and still receive federal funding for Medicaid expansion. (This changed under the Trump administration, which approved Medicaid work requirements for several states. But all of those approvals were revoked by the Biden administration.)
In January 2015, Brad Wilson, President and CEO of Blue Cross Blue Shield of North Carolina, threw his weight behind the push for Medicaid expansion,notingthat “expanding Medicaid is the right thing to do for North Carolinians.”
Thom Tillis, who was sworn in as US Senator for North Carolina in January 2015, used to be strongly opposed to Medicaid expansion. But in October 2014, just two weeks before the election, henotedthat “we’re trending in a direction where we should consider potential expansion… I would encourage the state legislature and the governor to consider it.” (Tillis defeated incumbent Democrat Kay Hagan in the 2014 election; HagansupportedMedicaid expansion).
By late July 2015, McCrory still had not revealed his proposal for Medicaid expansion, and advocates had begun to tire of waiting, pushing the Governor toreveal his planor admit that hedidn’t have one. And State Rep. Ken Goodman (D, Richmond) — a Medicaid expansion supporter —questionedwhether McCrory would have the political clout to expand coverage anyway, givenS.B.4(which prevents the governor from unilaterally expanded Medicaid) and the fact that the majority of the state legislature was opposed to Medicaid expansion.
In September 2015, the NC Justice Centerintroduced radio and digital advertising calling on Gov. McCrory to reveal his plan for Medicaid expansion, noting that he said the holdup was the unknowns surroundingKing v. Burwell earlier in the year (the outcome of that case was decided in June 2015, with the Supreme Court ruling that ACA subsidies were legal in every state, and paving the way for states to utilize private health plans for their Medicaid-eligible population).
By late 2015, however, McCrory had mostlywalked back his support for Medicaid expansion, explaining that any expansion proposal would have to wait at least three years, while other Medicaid reforms are made in the state (see details above, regarding the transition to Medicaid managed care that eventually took effect in 2021). McCrory and President Obama had “irreconcilable differences” regarding expansion, and McCrory basically tabled the idea for the remainder of his time in office.
The governor’s race in North Carolina wasone of the tightest in the countryin 2016, and Cooper won by a razor-thin margin that was contested for weeks by McCrory. McCrory eventually conceded in early December.
Medicaid expansion discussion during Cooper administration
On January 4, 2017, Gov. Cooperannouncedhis intention to file an amendment to North Carolina’s Medicaid plan by the end of the week, expanding coverage as called for in the ACA. On Friday, January 6, henotified CMS that his proposal was posted on the North Carolina Department of Health and Human Services websitefor a required ten-day public comment period.
Cooper’s plan was to file an amendment to the1115 waiver proposal that North Carolina submitted to CMS in June 2016to overhaul Medicaid without expanding it (as described above, that proposal was ultimatelyapproved in the fall of 2018, albeit without Medicaid expansion). Once filed, Cooper’s amendment would have to have been approved by CMS, and the state would have had to secure the funding to cover its portion of the cost of expansion.
Cooper wasasking North Carolina hospitals to contribute the fundsthat would have been necessary to cover the state’s portion of the cost of expansion (states began paying 5% of the cost of Medicaid expansion in 2017, and that gradually increased until it reached 10% in 2020, where it will remain going forward).
Ultimately, Cooper never filed his proposed amendment with CMS. But Republican lawmakers in North Carolina reacted swiftly to condemn Cooper’s announcement, noting that the state enacted legislation (S.B.4) in 2013 that prevents the governor from expanding Medicaid unilaterally (the legislation blocks any “department, agency, or institution” of North Carolina from expanding Medicaid without the consent of the General Assembly).
In aletter to CMS, Republican leadership from North Carolina’s House and Senate asked CMS to reject Governor Cooper’s proposal on the grounds that it was illegal under S.B.4.
Cooper hadsaidthat he didn’t believe S.B.4 applied in this case, as it impeded “the core executive authority of the governor to accept federal funds to look out for the health of the people.” That argument was along shot, but the stakes were high and Cooper was doing as much as he could to secure coverage for more than half a million of the state’s poorest residents.
A week after Cooper announced his intention to expand Medicaid by amending the pending1115 waiver, North Carolina House Speaker, Tim Moore and Senate President Pro Tem, Phil Berger,filed a federal lawsuit(naming the NC and federal departments of Health and Human Services as defendants) to block Cooper’s efforts to expand Medicaid without legislative approval. Moore and Bergersaidthat Cooper’s “unconstitutional Obamacare expansion scheme” necessitated “swift legal action.”
Medicaid expansion proponentsnoted that the lawsuit filed by Moore and Berger was an overreach, and that Cooper’s efforts to expand Medicaid did not require a temporary restraining order, nor were they an issue for a federal court.
However, on January 14, 2017, the day after Moore and Berger filed their suit, a federal judge issued an orderblocking CMS from approving Cooper’s proposalfor the time being.
Since Cooper never filed his proposed 1115 waiver amendment to expand Medicaid, Moore and Bergerdropped their lawsuit in July 2017.
H.655, introduced in North Carolina’s House of Representatives in April 2019,called forthe expansion of Medicaid, albeit with a work requirement as well as premiums equal to 2% of household income. H.655 also included mandatory participation in wellness programs/preventive care. H.655 advanced out of the House Health Committee, but was not taken up by the full House (and thus was not considered by the Senate).
Governor Roy Cooper had made it clear that he was prioritizing Medicaid expansion in 2019, andincluded it in his budget proposal. Republican lawmakers continued their long history of opposition to Medicaid expansion, and Coopervetoed their budget in June when it didn’t include Medicaid expansion.
Cooper hadvetoed budgets before, but Republicans had a supermajority and were able to override his veto. They no longer had a supermajority in 2019, but House Republicansoverrode the vetoin a surprise vote when most of the Democratic representatives were at a September 11 memorial ceremony and had been told no voting would take place. The Senate did not act on the override before the end of the 2019 legislative session.
Democratic legislatorsagain pushed for Medicaid expansionin 2020, citing increased health risks and the rising number of people who have lost employment-related insurance coverage due to the Covid-19 pandemic. However, expansion was yet againrejected.
The issue continued to be a point of conflict between Cooper and the GOP-dominated legislature. But Cooper ultimately did sign a budget in late 2021. It didn’t include Medicaid expansion, but instead called for a joint legislative committee to study the issue of Medicaid expansion and make recommendations to the legislature.
Both chambers of the legislature did strongly support Medicaid expansion in the 2022 session. But theycould not come to an agreement on the specifics, largely due to questions about whether to change the state’s Certificate of Need regulations (the North Carolina Hospital Association, which has always supported Medicaid expansion,did not support the Senate’s version of H.149due to the Certificate of Need changes it called for, which would have reduced hospital revenue).
The legislation that ultimately passed in 2023 does eliminate the Certificate of Need review forcertain types of medical facilities and equipment. But it took several more months for lawmakers to agree on a budget, which was a crucial element of Medicaid expansion implementation.
Gov. Coopernotedthat his preference would be for expansion to take effect as soon as possible, but the effective date was delayed due to lawmakers’ failure to agree on a budget. Cooper’s administration hadtentatively established October 1, 2023as a start date for Medicaid expansion. But that was contingent on the legislature allocating funding by September 1, and the administration acknowledged in late August that theOctober 1 start date was no longer feasible, given that lawmakers were not going to allocate funding by September 1.
The budget was ultimately approved by state lawmakers in September, and took effect without Cooper’s signature, allowing Medicaid expansion to take effect starting in December 2023.
In addition to the 600,000 people expected to gain coverage as a result of expansion (450,000 had enrolled by May 2024), North Carolina hospitals will also see a sharp decrease in the amount of uncompensated care they provide. Cooper has also noted that expanding Medicaid would create 40,000 jobs in North Carolina.
