As we look to rebound from the damage of the pandemic, one of the surest ways to jumpstart our business prospects is to close North Carolina’s health care coverage gap. And right now, state legislators negotiating our state’s final budget can do just that. The need has never been keener. The terms have never been better.
A forward-looking contingent of elected officials in Western North Carolina have recognized the high stakes and stepped up. Leaders in Graham, Jackson, Macon and Swain counties and in the towns of Franklin and Waynesville recently passed resolutions in support of closing the gap. Now we need legislators to do their part — as soon as this week.
People in the gap earn too much to qualify for Medicaid, but too little to qualify for a subsidy on the health insurance marketplace. Many North Carolinians clock in to jobs day after day, but they don’t receive health insurance from their employers. And hundreds of thousands of working North Carolinians still fall below the federal poverty line, which is around $26,000 for a family of four. This means there are thousands of hard working North Carolinians who cannot access basic health coverage.
The Kaiser Family Foundation has estimated that if North Carolina took action to close its coverage gap, more than 600,000 people would gain health insurance and access to proper care. For now they remain stuck in the gap.
According to the stat-rich Coverage Gap Impact Map compiled by the 118-member Care4Carolina coalition, 14.2% of workers in Catawba County are uninsured, above the state average of 13.8%.
Many small businesses cannot afford to offer health insurance to their employees or cover these costs while in the startup stage. In states that have expanded Medicaid, the percentage of small business employees covered by Medicaid increased from 9.1% to 13.4% from 2013 to 2016; the number of self-employed individuals covered rose from 7.3% to 11.6% during the same time.
Without a solution, many small businesses and entrepreneurs aspiring to start a job-creating enterprise are also stuck. In fact, when the NC Rural Center’s Small Business Policy Task Force conducted focus groups with small business people, two big ideas resounded across all the sessions: North Carolina must improve broadband access, and the state must close the health care coverage gap.
We know from our advocacy work that lawmakers want to support entrepreneurs and small business owners. What they may not be fully aware of is what a golden opportunity we have right now to fix the coverage gap.
The federal government covers 90% of the costs for the 38 other states that have elected to close their gaps through Medicaid. Federal law dictates that this funding level will not decrease. It was a reasonable deal before — now, it’s even better.
The American Rescue Plan provides states with a new incentive: a two-year, 5% increase in the federal match rate for Medicaid. For North Carolina, that would mean an influx of around $1.7 billion over the next two years.
Our legislature has prudently built up a budget surplus of $7 billion, giving it more than ample room to sign on to the federal government’s unprecedentedly generous offer.
In urging lawmakers to close the coverage gap, former N.C. Secretary of Commerce Sharon Decker (who served in a Republican administration) wrote, “North Carolina cannot afford to be left behind as the rest of the country guns its economic engines.”
Decker, like our members, knows that small business is the backbone of our economy. But for our small businesses to really flex their muscles, we need the General Assembly to get to work now — as you read this — and tailor a program to close the coverage gap.
Matt Raker is executive director of Mountain BizWorks, which works to build a vibrant and inclusive entrepreneurial community in 26 counties of Western North Carolina by helping small businesses start, grow and thrive. Mike Hawkins is president of Pisgah Enterprises, Inc, and co-chair of the NC Rural Center’s Small Business Policy Task Force. In 2019, the NC Rural Center named him Rural Advocate of the Year.