Decline to pursue state-based health exchange and Medicaid expansion
North Carolina Senate leaders introduced legislation last Wednesday to opt out of participation in several costly provisions of the federal Affordable Care Act, also known as Obamacare.
Senators Tom Apodaca (R-Henderson), Harry Brown (R-Onslow) and Bob Rucho (R-Mecklenburg) filed Senate Bill 2 to exempt North Carolina from establishing a statebased health insurance exchange or a state-federal partnership exchange.
The bill also directs the N.C. Department of Insurance to return unspent taxpayer funds awarded by the federal Department of Health and Human Services earlier this month to create a state-federal partnership exchange.
“Obamacare was forced on us against our will by the federal government, and they should shoulder the burden of implementing it,” said Sen. Apodaca. “Any claim that North Carolina would ‘control’ this program is nothing more than an illusion.”
Senate Bill 2 also rules out expansion of the North Carolina Medicaid program. In its 2012 decision on Obamacare, the U.S. Supreme Court exempted states from the federal mandate to expand Medicaid eligibility. Based on the court’s ruling, North Carolina has the authority to opt out of expansion.
Costs for North Carolina’s existing Medicaid program have increased significantly in recent years. In 2012, the General Assembly was forced to fill a surprise Medicaid shortfall that totaled more than $500 million. Recent figures from the N.C. Department of Health and Human Services indicate that an expansion of the program would add hundreds of millions of dollars in additional state costs to North Carolina’s Medicaid budget through 2019.
“Senate Republicans are committed to ensuring every North Carolinian receives the highest quality health care and outcomes,” said Senate President Pro Tempore Phil Berger (R-Rockingham). “Saddling our citizens with the enormous costs of a new federal bureaucracy and entitlements is simply not the way to achieve this goal.”
Under Obamacare, each state must have in place a health exchange where individuals and small businesses, which are now mandated to have insurance, can purchase health care coverage. There are three options: a state-run exchange, a state-federal partnership exchange and a federally- run exchange. Senate leaders have spent months evaluating the implications of each type of exchange.
In November 2012, former Gov. Beverly Perdue prematurely declared her intent to establish a state-federal partnership exchange – three months before the deadline for the state to make this declaration – while at the same time applying for $73.9 million dollars in federal grant funding to set up the new government program.