Mixed News for NC Healthcare

Health care reformThe past week brought a flurry of news stories about health coverage in North Carolina. Among the national headlines (including court cases that could take money out of residents’ pockets), our state’s own Senate passed a law that undermined Medicaid as we know it.

In the world of NC health, there were two stories that fell definitively in the “negative” column, and one in the “plus.” Here’s the happy news, first:

  • More than 182,000 families will receive refunds from their health insurance providers. Due to a provision in the Affordable Care Act, insurance companies are required to follow the 80/20 rule. This ensures they spend only 20% of member premiums on administrative costs and 80% on patient care. During the first few years this rule was implemented, quite a few NC customers received refunds.

For the 2013-year plan, more than $8.5 million is being refunded to customers in North Carolina whose plans overspent on administrative costs. Families should check their mailbox in the coming weeks for checks that will be between $43 and $129.

  • North Carolinians who receive Affordable Care Act subsidies could see them disappear. A federal appeals court ruled last week that customers in states that use the federal insurance marketplace cannot receive subsidies for buying health insurance. North Carolina is one of 36 states that declined to set up its own marketplace, and as such, according to the ruling, state residents are ineligible for federal help purchasing health insurance.

In North Carolina, 325,000 residents purchased health insurance with the assistance of subsidies. Although the amount of help receives varies by income, some estimates show North Carolinians could expect to pay around 75% more for health insurance if the federal ruling is upheld.

The good news here is that simultaneous to the federal appeals court decision, a circuit panel ruled that all Affordable Care Act customers are eligible for subsidies. Ultimately, these cases could end up in the Supreme Court, which will be able to balance the disparate rulings against each other.

  • And finally, last week the NC Senate disregarded the wishes of doctors, the NC House, and the Governor, and passed sweeping changes to the state’s Medicaid system. In a 28-17 vote, Senators decided to pass off Medicaid management to a new, yet-unformed, agency and place patient care in the hands of for-profit organizations.

The idea of these Managed Care Organizations (MCOs) has persisted as conservative lawmakers across the country have implemented these plans, intended to cut healthcare costs. Right now in North Carolina, private practices and hospitals accept Medicaid, much as they would private insurance. Part of the problem with that has been unpredictable costs, and frequent cost overruns.

State Senators felt confident that giving a set amount of money to the MCOs and rewarding them for under spending would solve the state’s budget problems. It might solve the black-and-white numbers on paper, say critics, but patient care will surely suffer. A statement from North Carolina Medical Society reads, in part, “These outside managed care companies have a dismal history of success.”

The House of Representatives and the Governor both oppose this plan, so it has a slight chance of being implemented statewide. Instead, the results of passing such a contrary bill will reveal themselves in the coming weeks, as lawmakers in Raleigh fight to find consensus, dragging out even longer an expensive budget session, that is already a month longer than planned.




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  1. Mary Dickinson

    Shortsightedness again puts the people of North Carolina and their well-being in jeopardy. This NCGA is unable to to serve the people it represents and that should be its primary goal. Passing off Medicaid management without having a clearly formed replacement will clearly put us all in danger of losing critical support for our health care costs. Apparently, this is okay.


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