March 10--North Carolina's decision to reject $2 billion of Medicaid money annually will keep former truck driver Dempsey Stanback and thousands like him reliant on charity because they can't afford health insurance.

The decision last week also could drive up costs for people who have health insurance -- doctors and hospitals have historically raised their rates on people who have insurance coverage to recover losses on people who don't.

Stanback, who lives on McBain Drive in Fayetteville, would like to get Medicaid. It's not certain that he would have qualified if the state had accepted the $2 billion, but the decision to reject the money guarantees his ineligibility.

"I drove trucks almost all my life, and my back went out on me, so they took me out of the truck, and I draw my Social Security now," Stanback said. His Social Security covers his rent and other living expenses but isn't enough to pay for insurance, he said.

People in the health sector are assessing the effects of the new state law that opted North Carolina out of the Medicaid part of the federal Affordable Care Act, the president's health care reform program.

The Medicaid expansion was intended to provide government health insurance to hundreds of thousands of low-income North Carolina residents.

"We were in hopes that the Medicaid expansion would help more of the population. There's such a large uninsured population in Cumberland County," said Georgia Stewart, the program manager at Cumberland HealthNET. Stewart helps Stanback get nearly free care for his diabetes and high blood pressure.

"They wouldn't have been able to take the whole population (with the expansion), but it would have been able to help us, and the other community we work with that help uninsured, to see a bigger population here," Stewart said.

HealthNET is one of several nonprofit and government agencies in Cumberland County that help uninsured people get health care for free or at reduced cost.

HealthNET arranges doctor appointments for people with long-term health problems, such as high blood pressure, asthma and diabetes. The patients pay a $20 co-pay for their medical appointments, and the doctors agree to write off the rest of their bills, Stewart said.

The agency has about 900 clients treated by 19 medical practices in Cumberland County, she said.

Statistics from the state Division of Medical Assistance show that 59,419 of the estimated 325,000 people living in Cumberland County are enrolled in Medicaid, the government's health insurance program for the poor.

As of 2011, 58,000 people in the county had no health insurance, according to an estimate in a report by the N.C. Institute of Medicine.

It's unknown how many Cumberland County residents would have become eligible for Medicaid if North Carolina had accepted the expansion, said Heather Skeens, the deputy director of the county Department of Social Services.

Statewide, the Institute of Medicine estimated 500,000 people would have become eligible, though some are thought to already have private insurance.

Too expensive

Critics of the Medicaid expansion said it's too expensive for the nation's taxpayers. North Carolina would eventually have to contribute 10 percent of the cost, another expense they disliked. Also, a recent audit found severe expensive flaws in the North Carolina Medicaid program. Opponents said the program shouldn't be expanded until those problems are resolved.

Opponents also argue that some poor people who have private health insurance would drop their insurance to get the Medicaid coverage, putting the government in competition with the private sector.

When he worked, Stanback said, he had private insurance through his job that covered treatment for his blood pressure and diabetes. After he had to quit several years ago, he said, he had Medicaid for 90 days. Then it was cut off.

HealthNET connected Stanback to a doctor who treats him for $20 a visit, he said, and relatives have helped him with some expenses. Although he was originally sent for his chronic illnesses, he said the doctor also has helped him with the herniated discs in his back and a tumor on his foot, which needs surgery.

"I never did thought I would have to ask people to help me because ... I always worked all my life. And I thought maybe Medicaid would be there for me when I needed it, but it's not there for me. And I paid into it just as much as anybody else has, maybe more," Stanback said.

North Carolina hospitals hoped that the state would accept the Medicaid expansion because the federal government is scaling back its Medicare payments. It was thought the Medicaid expansion would partly compensate for that reduction.

Hospitals lose money on three out of four hospital patients, said Don Dalton, spokesman for the N.C. Hospital Association. Those three either have no insurance, have Medicaid or have Medicare, which is the government's health insurance program for the elderly, and none pay the full cost of their care, he said.

The hospitals will look for ways to cut their costs, Dalton said, and may eliminate money-losing services that patients had grown to expect.

Cost-shifting

Hospitals also could levy higher fees on the patients who have private insurance, Dalton said.

That practice is called cost-shifting, said Ken Lewis, president of the N.C. Association of Health Plans. Cost-shifting has driven up the price of private insurance over the past decade, Lewis said.

"If the federal government continues to reduce what it pays to all providers for the government products, then there will likely be continued cost-shifting," Lewis said. "That means your insurance, your private insurance, will go up."

Premiums, copays and other expenses borne by the patients and their employers would rise, Lewis said, and some may elect to reduce their benefits.

But Medicaid expansion isn't necessarily a solution the public wants, Lewis said. The country faces difficult choices.

"The natural answer would be: If you pay what it actually costs, if you stop underpaying providers, then the cost-shifting stops," Lewis said. "So that means your private insurance doesn't go up as much, but your taxes go up more. It's kind of like squeezing a balloon. ... You squeeze on one side, and it comes out on the other."

Staff writer Paul Woolverton can be reached at woolvertonp@fayobserver.com or 486-3512.

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