Jon D’Angelo, chair of the North Carolina Council on Disabilities, knows the consequences of cuts to Medicaid reimbursement rates.
He lives with spinal muscular atrophy and relies on Medicaid, which pays for direct support workers who care for him in his home. Without those workers, he and thousands of other medically fragile people across the state would likely be forced to live in institutions.
Since the N.C. Department of Health and Human Services slashed reimbursement for Medicaid-covered services on Oct. 1, the workers who care for D’Angelo have taken a significant hit in pay — losing $345 in income over the past three weeks.
“That’s a car payment, that’s a piece of rent, that’s health insurance,” he said. “With most jobs, pay goes up, not down. These cuts will result in direct care workers looking for other jobs, and honestly, I can’t blame them.”
D’Angelo was among the more than 200 people with disabilities, advocates and support agency personnel who traveled to Raleigh on Tuesday in hopes of persuading lawmakers to reverse the cuts, which were implemented amid a political stalemate between the state’s Republican-led General Assembly and Democratic Gov. Josh Stein.
For nearly a month, they’ve all been at odds over the annual Medicaid “rebase” — the amount of funding needed each year to keep up with changes in the number of people covered by the program and the cost of caring for them.
D’Angelo’s remarks were part of the advocacy day, organized by a loose coalition of dozens of health care associations from across the state. He was one of several speakers who highlighted the range of services that North Carolina’s more than 3.1 million Medicaid beneficiaries may lose if the cuts remain in place.
When services shrink, overdoses rise
Megan Coyner, executive vice president of Addiction Professionals of North Carolina, warned that the cuts will make it harder for enrollees to access prevention and recovery support for substance use disorder.
The threat hits close to home for Coyner. Her mother died of a fentanyl overdose, and she’s been in recovery herself for the past five years.
“These cuts are going to force providers to lay off staff to eliminate services, and when we eliminate services, especially in substance use, we see overdoses rise,” she said. “Sometimes people find their way to a local emergency department or to a doctor’s office, but oftentimes, when services are not available, people find their way back to using drugs.”
Johnnie Thomas, a member of Alliance Health’s Consumer and Family Advisory Committee, said he experienced homelessness for three decades before becoming “re-stabilized” with assistance from Medicaid and other entitlement programs.
“I stand here before you today because [I had] peers to support me, therapists to listen to me, doctors that had to deal with my physical issues and, more importantly, the agencies that [worked] tirelessly — that helped me reach, inspired me and encouraged me,” he said.
He recalled advocating for North Carolina to become the 40th state to expand access to Medicaid, a decade-in-the-making measure that finally passed with bipartisan support in 2023. More than 685,000 people, most of them working adults, have joined the rolls under expansion, which raised the state’s previously strict income limit for eligibility.
Thomas fears that accomplishment could be undone if the rebase stays underfunded.
“Why would you take that hard work and just throw it away?” he asked. “How do they think we’re supposed to feel and deal with it?”
Meeting with legislators
The advocates roamed the halls of the state legislative building on Tuesday afternoon, buttonholing lawmakers and standing in office doorways to share personal stories about their dependence on Medicaid.
Amy Miller, CEO of OE Enterprises, a Hillsborough nonprofit that serves adults with intellectual and developmental disabilities, took three of her organization’s clients to meet with their local representative, Renée Price.
Price, a Hillsborough Democrat, listened as Preston, an OE Enterprises client who has been able to develop skills and earn a paycheck through one of the organization’s day programs, described his experience. He said the program, which he joined last year, has been “wonderful” and “a blessing.”
The reimbursement rate for services provided through that program has been reduced.
Most of the state’s Medicaid providers have seen their rates cut by 3 percent to 8 percent, with some categories — including nursing homes and hospitals — receiving cuts as steep as 10 percent.
Price said she hopes her fellow legislators would be inspired to reverse the cuts.
“It’s critically important that those of us in this building understand there are many, many people across North Carolina that rely on Medicaid,” she said. “It is a vital program, and we need to completely fund it.”
Her sentiment was echoed in the results of a survey of people with disabilities and caregivers conducted earlier this month by the North Carolina Council on Developmental Disabilities. Nearly all of the survey’s 345 respondents said Medicaid was “essential to their survival and quality of life,” according to a summary.
“The Medicaid cuts in North Carolina are already having a profound impact on individuals with disabilities, their families and the professionals who support them,” the council wrote. “While some respondents have not yet experienced direct effects, the overwhelming majority report reduced wages, disrupted services and emotional distress.”
Tangled up in other priorities
The advocates are hoping a resolution could come from the legislature. The state Senate and House of Representatives have agreed to provide an additional $174 million to Medicaid’s base funding. That amount still falls short of what the department had initially asked for, but NC DHHS has said it would be enough to eke through the end of the fiscal year.
But the two chambers’ leaders have other priorities, too, that have gotten tied up with resolving the Medicaid funding issue. And they’re in conflict.
That’s led to plenty of finger-pointing.
Senate leader Phil Berger (R-Eden) told reporters after his chamber recessed for the day that resolution to the Medicaid impasse rested with either the House or the governor.
Berger has tied greenlighting the Medicaid funding to the House agreeing to release funds for a new state children’s hospital, something that was included in the budget in 2023.
“We sent a bill over to the House that they didn't take up,” he said. “They sent a bill over to us that we felt was, that that they should take up our bill.”
The House has gotten a new speaker since that agreement, though. The new speaker, Destin Hall (R-Granite Falls), has said he doesn’t agree with spending $2 billion in the state dollars that’ve been earmarked for the facility.
So, now the two chambers are locked in a battle of wills over who’ll bend first, using these items — and a few others — as bargaining chips.
“I don’t know what the right word is, but I am frustrated, discouraged, demoralized that we have not yet figured this out,” said Rep. Tim Reeder (R-Greenville), an emergency room physician, during a meeting of the legislative caucus focused on issues around disabilities. “What I would encourage you to say to the Senate is … we don’t need to tie this up with the children’s hospital, which has a whole different set of issues and discussions.”
Rep. Donna White (R-Clayton) also told all of the advocates that it’s unfair for them to be caught in the crosshairs.
“We have talked with the governor, we have talked with DHHS, we have an understanding that they would continue to go just as they’re doing now,” she continued. “There is no reason we should hold you all — providers, parents, caregivers, people who have needs for services — there is no reason for you to be in this compromised position.”
Then she took a swipe at the leader of the other chamber.
“It is a shame when an able-bodied person would deny the care to someone who is not able- bodied to get their name on a hospital,” she said. “It has nothing to do with who needs the care.”
Common opponent
One thing the two chamber leaders can agree on is that they feel like the governor created what Hall called a “phony crisis.”
He and other legislative Republicans have said the Stein administration did not have to reduce Medicaid rates this early in the state fiscal year.
“He had every assurance that we were going to come back and provide more funds again,” Hall told reporters. “He did this on the heels of us giving $600 million to Medicaid. So it’s a completely contrived crisis that at this point, in my opinion, he’s doing it for solely political purposes.”
“The cuts at this time are all on the Stein administration,” Berger said.
Members of the executive branch disagree. An Oct. 9 letter written by DHHS Secretary Dr. Devdutta Sangvai on behalf of Gov. Stein to legislative leaders outlined the difference between this year’s negotiation and previous years.
“We acknowledge in recent years no Medicaid reductions were made while legislators continued to resolve budget negotiations,” the letter said in part. “Those years were significantly different. In previous years, budget negotiations were active, it was early in the fiscal year, the funding shortfall for Medicaid was relatively small, and there was expected buffer from pandemic-era federal funds that could make up the gap in state appropriations. None of those factors are true now.”
Late in the day, one legislative Republican, Rep. Donny Lambeth (R-Winston-Salem) proposed a “Hail Mary” solution in the form of a heavily amended bill that would give DHHS the ability to use funds from a Medicaid reserve fund to cover any shortfall.
“Because it’s a reserve fund, it’s already funded under their umbrella,” he said.
But it’s not clear if DHHS can use that money without a green light from the legislature.
“You probably could make an argument that they do, and others could probably make an argument that they don’t, really, because … it’s not been allocated for this purpose, and that’s where kind of the rub is,” Lambeth said. “That’s a good question for the lawyers, because I don’t really know.”
The amended bill passed a critical committee, will hit the House floor for a vote tomorrow and looks likely to pass.
But the Senate has already gone home. So, even this solution will likely sit until both chambers are back in Raleigh.
This article first appeared on North Carolina Health News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
