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A deal too good to pass up

Susan Fitzgibbon Shumaker and Erica Palmer Smith / April 29, 2021

We have an increasingly beneficial deal at our doorstep to close North Carolina’s health insurance coverage gap for hundreds of thousands of North Carolinians – just the kind of fuel our economy and pandemic recovery efforts need.

The federal government’s new $1.9 trillion stimulus package makes significant additional funding available for states that close their coverage gap. That extra funding could boost priorities like broadband access and long delayed investment in other healthcare priorities.

Susan Fitzgibbon Shumaker

The coverage gap refers to people who earn too much to qualify for Medicaid, but make TOO LITTLE to qualify for a subsidy on the health insurance marketplace. The Kaiser Family Foundation has estimated that if North Carolina took action to close its coverage gap, more than 600,000 hardworking people would gain health insurance and access to proper care.

This group includes small business owners, childcare providers, service workers and many pastors. They are parents raising small children. They are our farmers and frontline workers. More than 12,000 are our veterans.

North Carolina is one of only 12 states that have not yet acted to close the coverage gap. Many states have found creative solutions to leverage their programs to promote other beneficial outcomes including employment. Montana, for example, couple’s insurance benefits with a highly-successful voluntary workforce training program.
The federal government covers 90 percent of the costs for states who close their coverage gap. Federal law dictates that this funding level will not decrease. The federal deal was already very good. Now, it’s even better.

Erica Palmer Smith

The COVID-19 Relief package provides states with a new incentive to close their coverage gaps: a two-year, 5 percent increase in the federal match rate for Medicaid. For North Carolina, that would mean an influx of between $1.7 and $2.4 billion over the next two years.

The N.C. Department of Health and Human Services estimates the state’s cost for closing the gap would be roughly $500 million annually. That means if we close the gap, additional funding of $700 million to $1.4 billion will come to our state above and beyond the cost to ensure health care for our neighbors.

These additional resources could do wonders to help our state recover from COVID-19. The no-strings federal dollars could mean expanding broadband and telehealth; serving more intellectually and developmentally disabled patients through what’s known as innovation waivers; and rebuilding our workforce after so many have lost their jobs.

But the clock is ticking. The new funding opportunity is open to states that close their coverage gap within six months of the COVID-19 bill’s enactment.

A deal this good, a win this roundly beneficial, is something every North Carolina leader should embrace. It’s time for North Carolina to close the coverage gap.

Susan Fitzgibbon Shumaker, RN, MHA, is president of Cone Health Foundation and a Fellow of the American College of Healthcare Executives<.

Erica Palmer Smith is the executive director of Care4Carolina, a statewide coalition of 87 organizations that advocates for expanding access to quality, affordable healthcare.


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Since 1967, the Carolina Peacemaker has served as North Carolina’s leading news weekly with a national reputation. Founded by Dr. John Kilimanjaro, the newspaper is published by Carolina Newspaper, Inc.

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