North Carolina health insurance overview
North Carolina’s new governor is intent on expanding Medicaid as called for in the ACA, but he faces a resistant state legislature that has filed a lawsuit to block his efforts to expand coverage.
North Carolina also generated headlines in the fall of 2016, when it was announced that benchmark (second-lowest-cost silver plan) premiums for exchange plans available in the state would increase by an average of 40 percent in 2017 (in rural areas of the state, they rose more than 80 percent), which was considerably higher than the 22 percent average across all the states that use HealthCare.gov.
It’s important to note that overall premiums in the exchange rose by an average of just over 24 percent. But some lower-cost insurers that had offered benchmark plans in 2016 exited the market at the end of the year, leaving higher-cost plans to take over the benchmark spot.
But premium subsidies are based on benchmark premiums, so subsidies grew in 2017 to offset all or most of the rate increases for subsidy-eligible enrollees. 91.5 percent of North Carolina exchange enrollees were receiving premium subsidies in 2016.
North Carolina has not accepted federal funding to expand Medicaid under the ACA, and the state has allowed grandmothered (transitional) health plans to continue to renew. Both of these are factors that result in a sicker overall risk pool in the ACA-compliant individual market, which translates in turn to higher premiums.
Much of North Carolina’s political leadership has been opposed to healthcare reform, and the state has favored Republican presidential candidates since 2000. As of late-October 2016, Democratic candidate Hillary Clinton held a six-point lead over Republican Donald Trump. But Trump ultimately won the state — and the presidency. Trump campaigned on the promise of repealing and replacing Obamacare. Although most GOP lawmakers also want to repeal and replace the ACA, they have not yet agreed on a path forward, in terms of how much of the law should be repealed, or what should be included in a replacement bill.
Dr. John Spangler, a North Carolina family physician, public health specialist, and epidemiologist, explains that Trump tended to win rural North Carolina counties, where average incomes are lower and people tend to have poorer health. There are more than 549,000 people in North Carolina who enrolled in plans through the exchange, and most are receiving premium subsidies to make their coverage affordable. Spangler questions how these residents will continue to access health care if ACA subsidies are eliminated.
North Carolina health ratings
In 2014, North Carolina tied with South Carolina for 37th place on The Commonwealth Fund’s Scorecard on State Health System Performance. In 2015, however, the state took 37th place for its own, with South Carolina falling to 40th. North Carolina’s best-performing categories were Access, Prevention & Treatment, and Avoidable Hospital Use & Costs.
The state ranked second in the nation for the percentage of children ages 19 to 35 months who received all recommended doses of seven key vaccines (81 percent) and ranked ninth for the number of adults ages 50 and older who received recommended screening and preventive care (45 percent). High percentages of uninsured adults and high out-of-pocket medical costs relative to annual household income were among the state’s lowest-performing indicators. To improve to the level of the best-performing state, North Carolina would need to insure another 832,580 adults and 678,251 fewer adults would need to go without needed healthcare because of cost.
The Tar Heel state was 32nd overall in the 2016 America’s Health Rankings, down from 31st in 2015, but up from 37th in 2014. In 2016, North Carolina was 4th in the nation for Tdap vaccine rate, but 37th for lack of health insurance, and 43rd for public health funding.
Trust for America’s Health also analyzed public health data in North Carolina in their 2016 edition of Key Health Data About North Carolina, which provides information on several specific diseases and health factors. This analysis looked at insurance coverage data from 2014 and showed that 13.1 percent of North Carolinians were uninsured.
The Robert Wood Johnson Foundation’s county rating map for North Carolina lets you see how the counties in the state rank against one another based on a variety of health factor and outcome metrics. County uninsured rates varied from 14 to 26 percent, and the state was in the 90th percentile for the ratio of population to primary care physicians (1,410:1).
How Obamacare has helped NC residents
North Carolina’s refusal to expand Medicaid has resulted in an uninsured rate that is considerably higher than it would be if the state had accepted federal funds to make Medicaid available to all adults (assuming they’ve been legal U.S. residents for at least five years) with incomes up to 138 percent of the federal poverty level. But the ACA has certainly benefitted North Carolina residents who used the exchange to enroll in Medicaid or private plans. The state was one of six states that enrolled more than half of its potential market through its exchange in 2015, and has consistently had third highest enrollment among HealthCare.gov states.
According to U.S. Census data, 15.6 percent of North Carolina residents were uninsured in 2013. That had fallen to 11.2 percent by 2015, although there’s no doubt that it would be substantially lower if the state had accepted federal funding to expand Medicaid.
North Carolina health insurance rates, carriers for 2017
With Aetna’s departure at the end of 2016, two carriers remain on North Carolina’s exchange in 2017: Blue Cross Blue Shield of North Carolina and Cigna. BCBSNC offers exchange plans in every county in North Carolina in 2017. The company has also filed a lawsuit against the federal government after losing $123 million on exchange business in 2014 and $282 million in 2015.
Charles Gaba at ACA Signups calculated a weighted average rate increase of 24.3 percent in North Carolina for 2017. That’s before any subsidies are applied, however, and subsidies grew in 2017 to offset a large portion of most enrollees’ rate increases.
North Carolina enrollment in qualified health plans
The Kaiser Family Foundation estimated in late 2013 that 1,073,000 North Carolina residents could potentially buy qualified health plans through the exchange and that 684,000 of them would qualify for premium subsidies. By the end of the first open enrollment period, 357,584 people had purchased plans through the North Carolina exchange, with 91 percent of them receiving premium subsidies.
At the end of the third Obamacare open enrollment period, January 31, 2016, a total of 613,487 people had enrolled in private health plans through North Carolina’s exchange. That number includes renewals and new enrollees and made North Carolina #3 in HealthCare.gov enrollment for 2016. As of March 2016, 91.5 percent of enrollees were receiving premium subsidies.
North Carolina’s successful exchange enrollment numbers have been attributed to many factors, including the availability of navigators and advocacy organizations as well as public-private collaboration of various healthcare professionals and community leaders.
But enrollment for 2017 was 10 percent lower than it had been the year before. 549,158 people enrolled in private plans through the North Carolina exchange during the 2017 open enrollment period (November 1, 2016 through January 31, 2017). Across all the states that use HealthCare.gov, enrollment was about 5 percent lower in 2017 than it had been in 2016, likely due to uncertainty about the future of the ACA, combined with the Trump Administration’s scaling back on advertising and outreach for HealthCare.gov in the last week of open enrollment.
The Affordable Care Act in the Tar Heel State
In 2010, North Carolina’s U.S. Senators were divided on healthcare reform. Kay Hagen, a Democrat, voted yes on the ACA, while Richard Burr, a Republican, voted no. In the U.S. House, five Republican representatives from North Carolina voted no, while eight Democrats voted yes.
Burr remains in the Senate, but Hagen has been replaced by Thom Tillis, a Republican who opposes the ACA. Both Burr and Tillis voted to pass the budget resolution in January 2017 that began the process of using budget reconciliation to repeal spending-related parts of the ACA (as of early march, that process had not yet moved forward).
And the U.S. House now includes just three Democrats from North Carolina, and ten Republicans.
Governor Roy Cooper, a Democrat, took office in January 2017. He supports the ACA and wants North Carolina to accept federal funding to expand Medicaid, but the state’s legislature has clashed with him over whether he has the authority to expand coverage unilaterally, and Medicaid expansion also faces an uncertain future under the Trump Administration.
Cooper replaced former Governor Pat McCrory, who had served for four years as the first Republican governor of North Carolina since 1988. McCrory’s predecessor, Governor Bev Perdue, had stated that North Carolina would enter into a partnership exchange with HHS, but shortly after he took office, McCrory announced that the state would default to a federally-facilitated marketplace.
In addition, MrCrory also decided that the state would not move forward with Medicaid expansion, citing a problematic recent audit of the state’s existing Medicaid program, and noting that the program’s issues needed to be fixed before the state considered expanding it.
McCrory was not a fan of the ACA, but early in the 2014 open enrollment period, he softened his stance a bit in a public announcement to the state’s residents. While he still noted that he was opposed to the ACA, he provided information and resources to help direct people to Healthcare.gov and enrollment assisters.
In general however, the state’s government has taken a largely hands-off role in terms of promoting and implementing the ACA in North Carolina. But a strong network of community-based public health workers, navigators, and volunteers resulted in North Carolina having the third-highest HealthCare.gov enrollment in the country by the end of 2016 open enrollment period (the state retained that position in 2017 as well).
NC Medicaid/CHIP enrollment
North Carolina is currently one of 19 states that has not yet expanded Medicaid and has no pending plans to do so. The ACA would have expanded Medicaid to cover all legal residents with incomes up to 138 percent of poverty, but in 2012 the Supreme Court ruled that states could opt out of Medicaid expansion, and Gov. McCrory has thus far refused expansion.
In 2013, McCrory said that it would be unwise for the state to expand Medicaid in light of a recent audit that had uncovered fraud and waste in the state’s Medicaid system, but he left the door open for the possibility of Medicaid expansion in the future, as well as a possible switch to a state-run exchange, “if it becomes clear that the current course of action is not the best interest of North Carolina, our health care system and our citizens.”
Current Governor Roy Cooper wants to expand Medicaid, and send HHS a letter in early January outlining his intent to expand coverage by amending the state’s existing Medicaid plan. In response, the North Carolina House Speaker and Senate President Pro Tem sued the state and federal Health and Human Services Departments to block Cooper’s expansion. Shortly thereafter, President Trump’s Administration took over, and HHS is now headed by Tom Price, who opposes the ACA.
Because the state refused to expand Medicaid, North Carolina has hundreds of thousands of people (estimates range from 219,000 to nearly half a million) in the coverage gap, with no access to Medicaid or exchange subsidies. These residents would be eligible for Medicaid if the state were to accept federal funds to expand coverage. But there are no realistic insurance options available for people with incomes below the poverty level who do not qualify for Medicaid under the state’s existing eligibility guidelines: Non-disabled adults without dependent children cannot enroll no matter how low their income is, and parents with dependent children are only eligible if their household income doesn’t exceed 45 percent of poverty (a little over $756/month for a family of three in 2017).
Regardless, North Carolina’s total monthly Medicaid and CHIP enrollment grew by 26 percent from late 2013 to November 2016.
Is there still a high-risk pool in North Carolina?
Before the ACA dramatically reformed the individual health insurance market, coverage was underwritten in nearly every state, including North Carolina. This meant that pre-existing conditions could prevent an applicant from getting coverage, or could result in significantly higher premiums or policy exclusions. The North Carolina Health Insurance Risk Pool was created in 2009 to give people an alternative if they were unable to obtain individual health insurance because of their medical history.
When ACA implementation resulted in a guaranteed issue individual market in January 2014, risk pools were no longer necessary. The North Carolina Health Insurance Risk Pool ceased operations at the end of 2013, and members were able to transition to new, ACA-compliant plans issued on or off-exchange.
Some Republican health care reform proposals have called for a return to high-risk pools, which is not in the best interests of people with pre-existing conditions.
Medicare enrollment in the state of North Carolina
North Carolina Medicare enrollment reached 1.7 million individuals in 2015 – 17 percent of the state’s population, which is on par with national enrollment. Of North Carolina’s beneficiaries, 81 percent qualify based on age alone.
Medicare pays about $8,525 annually per capita in North Carolina, lower than the national average of $8,970. As of 2009, the most recent data available, the state ranks 10th in terms of overall Medicare spending with $14.1 billion per year.
North Carolina residents can enroll in Medicare Advantage plans instead of Original Medicare if they want additional benefits (although Medicare Advantage plans also has drawbacks, including smaller networks of doctors and hospitals). 30 percent of North Carolina Medicare beneficiaries were enrolled in Medicare Advantage in 2016; nationwide, 31 percent selected a Medicare Advantage plan.
Medicare recipients can also select a Medicare Part D for a stand-alone prescription drug plan. About 45 percent of North Carolina Medicare beneficiaries chose Medicare Part D plans, slightly higher than the national enrollment of 43 percent.
State-based health reform legislation
North Carolina passed a law in 2013 prohibiting the state from establishing a state-run or partnership exchange, and also rejecting Medicaid expansion under the ACA. Here’s a summary of 2017 health care reform legislation in North Carolina: