Huge Medicaid cuts loom after NC Republican leaders fail to reach funding deal

The state will cut Medicaid reimbursement rates on Oct. 1 without additional funding, and though the General Assembly unanimously passed two separate bills to try and solve the problem, Republican infighting derailed the effort.

The North Carolina House and Senate this week passed separate bills intended to fill a Medicaid funding gap that threatens to kick children with disabilities, seniors, and rural North Carolinians off their health care on Oct.1. The votes were unanimous in both chambers. Not a single lawmaker voted against either bill.

But the funding gap has still not been filled, Oct. 1 is now just 7 days away, and lawmakers are not set to return until three weeks after the state is scheduled to enact cuts that could cause some of the most vulnerable residents to lose their life-saving care.

Despite the legislature’s unanimous agreement that these cuts would be devastating, Republican leaders in both chambers could not agree on how to resolve the differences between the separate versions of the bills. And under the rules of the legislature, both chambers have to pass a single, unified bill in order for it to be ready for the governor’s signature and become law. 

This impasse means that two bills are the same as none, it means that the problem goes unsolved, it means that the runaway train continues to barrel forward.

Six weeks ago, Dr. Devdutta Sangvai, secretary of the North Carolina Department of Health and Human Services, sent a letter to lawmakers warning them the mini-budget they passed in July fell $319 million short of what the state needed to pay Medicaid providers. 

If lawmakers didn’t fill that gap by Oct. 1, Sangvai warned, the state would have to make significant cuts to reimbursement rates to doctors and hospitals.

Medical providers across the state already operate on thin margins, especially those in rural areas that rely on Medicaid payments to stay afloat. If the state cuts Medicaid reimbursement rates, then providers—from hospitals to home-care nurses—may have to cut services or could close down entirely, causing recipients to have to travel long distances for urgent care or leaving them with nowhere to go at all.

The legislature returned this week with only a few days to do something about the shortfall.

Both chambers agreed on the need for action, but Senate Republicans insisted on including more than $100 million in their bill to build a children’s hospital, a goal backed by Senate Democrats. But House Republicans do not want to fund that hospital and warned their Senate counterparts this week to send them a “clean” bill with only the Medicaid funding. 

The Senate ignored the warning. The House rejected the Senate bill and passed their own clean bill. The Senate refused to take up the House bill. 

No new votes are scheduled before Oct. 20

The specifics of the political dispute might be obscure, but the consequences of the legislature’s inaction, medical experts, Democrats, and Medicaid recipients say, will be direct and catastrophic.

Medicaid “[means] the difference between stability and hardship, between survival and suffering,” Rep. Julia Greenfield, a Democrat and former ER nurse, said in a press conference on Monday. 

“There’ll be harm to hospitals already struggling to stay open. There’ll be pay cuts for doctors and nurses, delays in care, real people losing access to life saving services,” she said. 

“And yes, people will die.”

‘It feels like the doors are closing’

Nearly 4,000 North Carolina children with severe disabilities rely on Medicaid for the expensive and extensive health care that allows them to live at home with their families rather than in some facility far away. If these cuts go into effect, the nurses keeping them alive and in their homes may no longer be available. 

Stacy Staggs has been trying to sound the alarm for months about what Medicaid cuts would mean for her 11-year old daughter, Emma.

“My hope is dwindling,” Staggs said in a phone interview on Wednesday. “It feels like the doors are closing.”

Emma is on Medicaid through a home care waiver program, and it pays for her feeding tube and the nurse who comes to her home every day so that her parents can work. Emma needs around-the-clock supervision. 

Staggs said that Emma’s care providers told her they would try to bear the extra costs as long as possible, but were worried. Which means Staggs is terrified. Medicaid keeps her daughter alive, and losing it would be no mere inconvenience.

“There’s nothing luxurious in this,” she said. “I have been asking our state and federal legislators if they wanna come to our house and shadow a shift and sit with me at four o’clock in the morning. Nobody’s taken me up on it yet.”

A recent health scare, Staggs said, offered a glaring example of the stakes of any Medicaid cuts.

Emma went into respiratory distress and began to turn blue. Her parents called 9-1-1 and soon several health professionals were attending to her care, clearing her airways. They took her to the hospital in an ambulance. She received excellent, complex, and expensive care.

Medicaid paid for what would have otherwise been an astronomical bill.

“[Just] the ambulance ride would have taken us out,” Staggs said.

Families like hers need Medicaid, and the consequences of service cuts will be like a tidal wave, Staggs said.
Hospital closures and provider shortages might start in rural communities, but they will tear their way across the state as the people who lose care in smaller counties travel to bigger cities seeking help, overwhelming already understaffed facilities.

“More people will seek care they can’t access, and whether that’s something respiratory and urgent, or a heart attack or a baby being born or, someone fell off the roof putting up Halloween decorations, like all of those things don’t stop,” Stags said. 

“What stops and what bottlenecks is the people, facilities, and money available to treat them.”

Money the legislature had a chance to provide this week.

October is “way too late” to fix the problem, Staggs said.

“If they leave Raleigh in this session [without a bill], they are directly responsible for additional preventable deaths of people in North Carolina,” she said. 

No matter what happens, Staggs said, she will keep fighting.

“We have to keep going. The stakes are too high.”

‘It breaks my heart’

The Senate passed its bill, 47-0. The House passed its version, 111-0. Republicans in both chambers blamed each other for why those votes ended up meaning nothing at all.

House members from both parties expressed outrage that Republican leaders had not come to an agreement in time.

“Not everything has to be leverage,” Rep. Grant Campbell, a Cabarrus County Republican, told Carolina Public Press.

In comments on the House floor ahead of the vote, Rep. Sarah Crawford, a Wake County Democrat, said she’d “been sick to my stomach, and that is not an understatement,” as Oct. 1 draws closer without a deal.

“ Providers will not be able to sustain these cuts,” she said. “They’ll have to [cut] services, [lay] off workers, and [make] the most difficult call to moms, dads, sisters, brothers, and tell them, ‘sorry, we can no longer provide services to your loved one.’”

She continued, “I wish that we were standing here today knowing that our vote on this bill would delay and hopefully avoid cuts altogether. But we can’t say that because after more than a month of hard work, countless discussions with the [NC Health] department, countless discussions across chambers, we do not have agreement with the Senate.

And it breaks my heart.”