Gov. Cooper Signs Bipartisan Medicaid Transformation Into Law, Bringing Tax Savings and Health Improvements to NC

July 02, 2020

Governor Roy Cooper today signed a bipartisan bill to fund Medicaid transformation in North Carolina. The change will deliver hundreds of millions of dollars in savings to taxpayers and improve health outcomes of those on Medicaid.

The bill was passed overwhelmingly by the House and Senate last week.

Here’s what North Carolina can expect to get from Medicaid transformation.

  • Hundreds of Millions of Dollars in Savings for Taxpayers: The state pays managed care organizations (MCOs) a set monthly fee for each person served by the Medicaid program. This is expected to be far less than the current fee-for-service structure where taxpayers pay for each service. A study from April 2019found that without this transformation, the costs over four years are expected to be $6.6 billion. When the move to managed care is implemented, the savings are expected immediately and would likely rise to over 11 percent by year four – that’s hundreds of millions in savings for taxpayers.

Because MCOs are paid a set fee, it is in their interest to make sure a person’s care is well-managed, that health care services are utilized efficiently, and that people are kept healthy. One of the ways they will do that is by addressing social factors that may negatively impact someone’s wellbeing.

Under the new Medicaid system, all the MCOs will assess non-medical needs that impact a person’s health, and if unmet, connect them with services to address them. For example:  

  • Food Security: Health plans selected by the state will invest in managing food insecurity for those on Medicaid. Making sure people have healthy meals will help keep people well, which lowers the cost to the system and improves health outcomes.
  • Housing: Health plans will work to ensure Medicaid enrollees have safe and adequate housing. If housing factors are exacerbating an illness, like childhood asthma, then it could be addressed. This investment will keep enrollees healthy, which is far less costly than the medical expense.
  • Transportation: If people cannot get to their doctor’s appointment, it’s hard to stay healthy. Under managed care, the health plans will work to make sure transportation isn’t a barrier to care. Access will be increased, which will improve outcomes and lower costs.

The changes coming to North Carolina through Medicaid managed care are far-reaching and innovative. They are good for our state’s fiscal health, and good for the health of some of our most vulnerable and underserved citizens and communities.

It’s a move we can all be proud of – and one that only happened because leaders from both political parties worked together to deliver it.


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