Will North Carolina Be the ‘Beginning of the End’ of the Medicaid Expansion Fight?

RALEIGH, N.C. — People who watch politics in North Carolina say that Phil Berger, a Republican who calls himself a fiscal conservative and a “social traditionalist,” is the most powerful man in the state. For years, as the top Republican in the State Senate, he blocked North Carolina from expanding Medicaid under the Affordable Care Act.

But in a sunny outdoor ceremony at the governor’s mansion late last month, with the dogwoods blooming in a sign of spring, Mr. Berger looked on with pride as Gov. Roy Cooper, a Democrat, signed Medicaid expansion into law. State officials estimate that the expansion will cover more than 600,000 North Carolinians.

Thirteen years after the adoption of the Affordable Care Act under President Barack Obama, Republicans are abandoning their opposition to Medicaid expansion. Lingering reservations about the welfare state and the cost of expansion are giving way to arguments about Medicaid as an engine for economic growth and a lifeline for struggling hospitals.

Mr. Berger cites a string of reasons for his change of heart: North Carolina, where the legislature is controlled by Republicans, revamped its Medicaid program into one that relies on managed care, which made it financially stable. New federal incentives made expansion difficult to resist. Hospitals, which stand to benefit from Medicaid reimbursement, will pick up 10 percent of the cost of the new program — ordinarily paid by states — and the federal government will pay the rest. Most North Carolinians who will benefit have jobs.

“I felt that I had a certain responsibility — that if the reasons that I had articulated for 10 years no longer exist, then I had a responsibility to be honest with myself and be honest with other people about that,” Mr. Berger said in an interview. “And so I talked to my members, and I told them where I was — and why.”

Ten states remain where Republicans have refused to expand Medicaid, most of them in the South, leaving an estimated 1.9 million uninsured adults in the so-called coverage gap. Too poor to qualify for subsidized private insurance through the Affordable Care Act but ineligible for traditional Medicaid, they are forced to get by with patchwork charity care or skip care altogether. They are disproportionately people of color.

Nationally, the coverage gap is expected to grow in the coming months because of the end of a pandemic-era policy that provided states with additional funding in exchange for guaranteeing that recipients of Medicaid would not lose their coverage.

Since 2017, voters in seven states — most recently South Dakota — have approved ballot measures to expand Medicaid, despite longstanding Republican objections. Now the question is whether North Carolina will be a turning point.

State Representative Donny Lambeth, a North Carolina Republican who pushed for Medicaid expansion, said Republican lawmakers in Tennessee had reached out to him, “curious as to how we did this.” Backers of expansion are looking toward Alabama, whose governor, Kay Ivey, a Republican, can act without legislative approval.

“This is the beginning of the end of the Medicaid expansion story,” said Lawrence O. Gostin, an expert in public health law at Georgetown University. Noting North Carolina’s place as a traditionally conservative state in the South, he added, “The recognition that even the state’s Republican legislature would sign onto Medicaid expansion will begin to chip away at the reluctance by conservative states.”

For Penelope Wingard, 59, who worked with children who have behavioral disabilities until she became sick with breast cancer in 2013, the Republicans’ turnabout is life changing. Ms. Wingard lost Medicaid when she finished radiation treatment and is now uninsured; she stitched together charity care when she needed eye surgery, racking up $50,000 in medical debt. She turned to advocacy, sharing her experience, but it was painful, she said.

“I’m proud that I didn’t give up,” said Ms. Wingard, who lives in Charlotte. “I wanted to give up. I didn’t want to talk about it anymore. I was just so angry. But today I can say I’ve been crying all day, tears of happiness, because I never thought this would happen in North Carolina.”

Years of Advocacy

North Carolina Republicans did not change their views on Medicaid overnight. The story of how they got from no to yes is one of intense patient advocacy, smart messaging, shifting politics, a determined Democratic governor and a handful of maverick Republicans. Support from local officials and sheriffs, as well as eager hospital executives, also played a role, as did Mr. Obama’s fading presence.

“If they had some kind of A.C.A. hangover, my guess is it has probably worn off,” Steve Lawler, the president and chief executive of the North Carolina Healthcare Association, a trade group for hospitals, said of Republican lawmakers.

Progressives set the table for expansion, partly by helping to elect Mr. Cooper, said the Rev. Dr. William J. Barber II, a prominent civil rights leader and longtime pastor in North Carolina. He described Mr. Berger as “a very regressive force” in state politics.

“They didn’t just change,” Dr. Barber said of Republican lawmakers. “They were forced to change.”

In addition to its creation of marketplaces for buying private insurance, the Affordable Care Act also required states to expand Medicaid to cover people earning up to 138 percent of the federal poverty level — currently about $41,000 for a family of four. The program was drawn up to be a good deal for states, with the federal government picking up all of the costs at first and then eventually paying for 90 percent of them, a higher share than for traditional Medicaid.

But conservative state officials balked, saying they did not trust the federal government to live up to its end of the bargain and did not want to contribute to what they saw as the welfare state. A group of states sued, claiming in part that forcing states to expand Medicaid was unconstitutional. In 2012, the Supreme Court upheld the Affordable Care Act but ruled that states could not be required to adopt expansion.

The following year, Dr. Barber began leading demonstrations every Monday at the North Carolina General Assembly to protest cuts to unemployment benefits, education and Medicaid. “Moral Mondays” made national news; as the weeks and months went on, thousands turned out and hundreds were arrested.

Mr. Berger, who had ridden a Tea Party wave to help deliver his party control of the State Senate for the first time in more than 100 years, had little inclination to bend. Republicans had a supermajority — enough votes to override a governor’s veto. Mr. Berger said unpredictable Medicaid costs had driven the state into the red.

“The thought of signing on to Obamacare, when the memory of that budget debacle was so fresh in our minds, was not something that was very appealing to us,” he said.

Hospitals, especially rural ones, were struggling and desperate for Medicaid reimbursement dollars. In the summer of 2014, the Republican mayor of tiny Belhaven, N.C., made a two-week trek to Washington to try to save a hospital that had closed. Dr. Barber walked part of the way with him.

Mr. Lambeth, the Republican state representative, who had recently retired after a long career as a hospital executive, was eager to put his own expertise to use. He led an effort to transform Medicaid in North Carolina from a fee-for-service program, in which doctors are reimbursed for each service they provide, into a managed care system with a fixed budget and metrics to monitor health outcomes.

Mr. Berger and Mr. Lambeth say their work fixing what they called “a broken system” cleared the way for expansion. Their critics blame Republicans for breaking Medicaid by starving it of cash so they could claim they had fixed it.

But Mr. Cooper, in an interview, said, “I don’t think there is any question that we made Medicaid more efficient.”

A Republican Reversal

The early push for Medicaid expansion in North Carolina came from the political left, led by the North Carolina Justice Center, a progressive research and advocacy group, which enlisted Ms. Wingard and others to tell their stories. But Peg O’Connell, a longtime health policy consultant, said backers needed a less liberal look. She helped found a new group, Care4Carolina, to take the lead.

“The most important thing we did,” she said, was to ditch the phrase “Medicaid expansion” and replace it with “closing the coverage gap” — a message that conservatives could embrace. She knew it had worked when a Republican lawmaker told her, without a trace of irony, “I will never vote for Medicaid expansion, but I will vote to close the coverage gap.”

Mr. Cooper called for expanding Medicaid when he ran for governor in 2016, and upon taking office the next year, he tried to fulfill that goal by working with the outgoing Obama administration. That did not sit well with Mr. Berger and the speaker of North Carolina’s House of Representatives, Tim Moore, a Republican.

“They sued me in federal court to stop it,” Mr. Cooper said, “and we kind of set it aside.”

But in the House, Mr. Lambeth and a small group of colleagues were at work on legislation. They looked at Indiana, which had expanded when Mike Pence, the former vice president, was governor. They examined Ohio and later invited John Kasich, a Republican who oversaw that state’s expansion when he was governor, to speak.

Mr. Lambeth took “a lot of grief” from his fellow Republicans, he said. But he found an ally in a Republican state senator, Kevin Corbin, who was in the insurance industry and tired of being unable to help working people.

“We’d see it all the time,” Mr. Corbin said. “A 27-year-old single mother comes in. She has two children and she makes $15 an hour. Her kids are already on Medicaid; she doesn’t have insurance. So I give her a quote and it’s $600 a month, and she’s not going to do that because she has to pay rent.”

By 2020, research was confirming what backers of Medicaid expansion had been saying; health outcomes were better in expansion states. Mr. Cooper tried to build bipartisan support by partnering with Republican county commissioners and sheriffs who backed expansion. After President Biden took office in 2021, Congress passed a coronavirus relief package that offered states additional financial incentives to expand.

But the most important thing that happened, people in the state agree, is that Mr. Berger changed his mind. That opened the door for other Republicans to fall in line.

“It’s like Nixon going to China,” Ms. O’Connell said.

Adam Searing, a health policy expert in Chapel Hill, N.C., who is affiliated with Georgetown University, sees politics at work. Polls show Medicaid expansion is popular. Mr. Cooper is more than halfway through his second term and cannot run again because of term limits, and Mr. Searing said Republicans seeking to reclaim the governorship wanted to “get Medicaid expansion off the table.”

The expansion does not go into effect immediately. It is tied to passage of the state budget. But in the days after last month’s signing ceremony, the mood in the North Carolina General Assembly was upbeat. Ms. O’Connell beamed as lawmakers and lobbyists congratulated her. Mr. Lambeth said Mr. Kasich, the former Ohio governor, had called to congratulate him.

The expansion bill contains a priority of Mr. Berger’s: a provision aimed at encouraging competition in health care by making it easier for companies to open new surgical centers and M.R.I. clinics.

Even so, Mr. Berger still has concerns. He worries that a shortage of health care providers has already restricted access to care. What good is having coverage, he asks, if you cannot find a doctor? Medicaid is not the system he would have crafted, he said, if he had “a blank slate.”

But he said he was able to reconcile his support for expansion with his philosophical opposition to big government programs: “We do not live in a perfect world.”