Medicaid Transformation: North Carolina’s Health Care Big Bang

Author: Donald K. Jonas, Ph.D.
Executive Director, Care Ring

Rather than tinker on the edges of our health care system in search of small improvements, North Carolina is on the cusp of a “big bang” transformation of how we provide health care to people with limited resources.

Described in a recent New York Times article as “one of the country’s most ambitious efforts” to transform health care, the way we pay for and provide health care services in North Carolina is about to radically change. North Carolina is embarking on what NC Department of Health and Human Services Secretary Dr. Mandy Cohen describes as “the largest change in the history of our Medicaid program.

In the next year North Carolina will test new models of care, including starting a $650 million pilot program, Healthy Opportunities, which will allow regions across the state to experiment with entirely new ways to improve health and wellness.

The first wave of change will be felt directly by our low-income neighbors. Over the course of the next few months 1.5 million North Carolinians receiving Medicaid services (which includes upwards of 80,000 people in Mecklenburg County) will enter a new system of care.

In this new system, the state will continue to have oversight responsibilities for Medicaid, but they will delegate the direct management of health services as well as the financial risks of serving low-income residents to managed care companies operating across multiple regions.

Managed care companies will offer a variety of options to entice beneficiaries to join their network. All health plans will be required to offer the same suite of basic clinical services such as coverage for office visits and blood tests. But plans will be able to offer Medicaid recipients services far beyond basic health insurance coverage, including:

- Uber or Lyft rides to grocery stores

- Gift cards to purchase school supplies or to take GED exam practice courses

- YMCA memberships

- Boy Scouts and Girl Scouts membership

Are we ready?

In early October, individuals currently eligible for Medicaid in North Carolina will be mailed information on enrolling in a managed care plan. By the middle of December they will need to have chosen a Medicaid plan, or a plan will be selected for them at that time.

While there are a host of potential benefits from this shift, including the prospect of reducing taxpayer exposure to future Medicaid costs by capping the annual amount of funds the NC General Assembly sets aside for Medicaid, there are also a host of potential pitfalls.

Medicaid beneficiaries have experience working with case managers for their primary care needs through the Community Care of North Carolina program, but now they must navigate a new managed care system with unfamiliar gatekeepers coordinating their care.

And if the experience of other states that have shifted Medicaid to a managed care system is a useful guide, there is the potential that private insurers may deny some services in an effort to hold down costs.

Some insurers may not stay for the long haul. Iowa shifted their Medicaid services to private managed care three years ago. When one of the major providers recently dropped out the program, families reliant on Medicaid were left feeling helpless and uncertain of how to get care.

The ripple effect of North Carolina’s health care big bang will reach far beyond the health care sector, touching many businesses and hundreds of thousands of residents.

In the coming months, Care Ring will hold community events and town hall meetings and share widely what we are learning about this transformation to help Medicaid beneficiaries, provider networks, and interested residents understand and adapt to this major change in health care.

Donald K. Jonas, Ph.D is Executive Director of Care Ring. Care Ring’s Medicaid Transformation Education and Engagement Initiative is supported by a grant from the Kate B. Reynolds Charitable Trust.

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