GOVERNOR SIGNS MEDICAID EXPANSION INTO LAW

On Monday afternoon, Governor Roy Cooper signed into law the legislation expanding Medicaid. When this law is finally put into effect, Cooper predicted that it would become “the working families bill of the decade.” With the bill's passage, according to Cooper, more rural hospitals can remain open and people will have access to more doctors, nurses, and mental health professionals because more people could afford to pay for their services. Additionally, those without insurance will be spared from financial ruin due to unpaid medical bills.

Once House Bill 76 is passed, it is anticipated that over 600,000 residents of North Carolina will qualify for Medicaid. The governor's approval of the state budget passed by the legislature later this year is a requirement for some provisions of the bill, but others are effective right away:

• Increased Medicaid payments made to hospitals by the Healthcare Access and Stabilization Program (HASP);

• Higher hospital assessments to fund the HASP program and NC Health Works coverage at the beginning of the next fiscal quarter;

• Discontinue the Certificate of Need (CON) review for:

  • psychiatric beds and facilities;

  • chemical dependency treatment beds and facilities;

  • replacement equipment up to $3 million, indexed to inflation;

  • an aggregate total of $3 million diagnostic center equipment that individually exceeds $10,000; and

  • early and recurrent screening, diagnosis, and treatment services for kids under 21 at home health agencies.

Ambulatory surgical centers that satisfy certain criteria will be exempted from CON review two years following the first HASP payment.

In counties with a population over 125,000, MRI machines would no longer be subject to CON review three years after the first HASP payment.

Once the budget has been approved, the second part, which expands Medicaid, will take effect. It contains:

• Medicaid coverage for adults aged 18 to 64 with incomes up to 133% of the federal poverty level, which will take effect once the start date has been approved by the Centers for Medicare and Medicaid Services (CMS);

• Workforce development initiatives that support Medicaid beneficiaries' employment.

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HOUSE BUDGET PROPOSAL UNVEILED

Republican leaders in the state House proposed a budget (House Bill 259) on Wednesday that would give all state employees a minimum 7.5 percent raise over the following two years. While maintaining the course of previously approved tax cuts, their budget plan would also fund initiatives to boost economic development and school safety.

Over the course of the proposed budget's two years, which cover the 2023–2024 and 2024–25 academic years, teachers would receive average raises of 10.2 percent. In contrast to Cooper's own budget proposal, which called for an average teacher pay raise of 18 percent, the proposed increase of 10.2 percent is significantly less.

The budget also gives retired state employees attention, increasing their pensions by 1 percent permanently rather than just giving them one-time bonuses as in previous budgets.

It also includes a number of non-financial policy changes that are well-liked by Republicans, like the prohibition of COVID-19 vaccine mandates and the banning of numerous measures that some environmentalists see as essential in the fight against climate change, like cap-and-trade regulations.

In order to improve the state's access to water and sewage, among other projects, the budget suggests investing $1 billion annually in infrastructure.

Democrats in the legislature and Cooper have harshly criticized the Republicans' plans to abolish corporate income taxes by 2030. The House budget proposal maintains this while also not accelerating the cuts even further, as some conservatives had demanded. The corporate franchise tax is also removed.

Personal income taxes in the state were already planned to gradually decrease from their current 4.99 percent rate to 3.99 percent in 2027. The proposed budget would largely maintain that course while accelerating one step.

This is not the final budget; Republican state Senate leaders might have alternative ideas that would necessitate further discussion later this spring or this summer. This implies that some of the figures for raises and other aspects of the budget could still change. However, it is a starting point that demonstrates what at least one of the two chambers of the legislature intends to support.

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INSURANCE BILLS ON THE MOVE

The General Assembly is moving forward on a number of changes to state insurance laws. Senator Todd Johnson (R-Union) is the primary sponsor of each of the three bills.

Senate Bill 134 stipulates, among other things, that businesses must complete underwriting investigations within 90 days. Johnson claimed the majority of companies offer trustworthy homeowners' insurance. However, he added, there are some "devious" companies out there whose business model involves asking customers an excess of questions that have nothing to do with their homes or coverage with the intention of using any incorrect responses as a technicality to deny coverage when people need it.

Supporters of Senate Bill 123 claim that some contractors have taken advantage of a gap in insurance law to avoid paying their subcontractors, a gap that this measure seeks to close. Anyone who knowingly prepares, issues, requests, or requires a certificate of insurance that contains information not contained in the underlying policy would be in violation of the proposed law.

A risk retention group would pay less tax under Senate Bill 319. Even steeper tax reductions than those sought by the industry itself, from 5 percent to 1.85 percent, are included in the bill. The North Carolina Captive Insurance Association expressed its desire for a 2 percent tax rate in North Carolina in a blog post from last month. Johnson stated at the meeting on Tuesday that since most states have that rate, dropping below 2 percent should encourage more such businesses to relocate to North Carolina.

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BLUE CROSS BLUE SHIELD SEEKS REORGANIZATION

North Carolina's largest health insurer, Blue Cross Blue Shield of North Carolina, is asking lawmakers for permission to restructure and establish a parent company, a move it claims will lessen regulatory oversight and help it compete with other major insurers. According to critics, it could result in higher premiums and less coverage for the millions of North Carolinians it insures.

According to House Bill 346, the insurer would be able to transfer some of its $4.5 billion worth of assets into a brand-new nonprofit parent company. The insurer would be owned by that parent company, but it would not be governed by the same degree of state regulation. The measure had its initial hearing before the House Health Committee on March 28.

Representative John Bradford (R-Mecklenburg), the bill's primary sponsor in the House, reported that 60 other lawmakers have endorsed it. Leaders of the majority and minority parties in both chambers have also endorsed it.

While it appears that the bill is poised to pass, the State Insurance Commissioner, Mike Causey, has expressed opposition and does not support the bill in its current form. Causey is concerned about the potential cost of the reorganization to the people and small businesses covered by Blue Cross. He is in discussions with the company and the bill’s sponsors in order to make the changes he feels are required.

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MOBILE SPORTS BETTING BILL APPROVED BY THE HOUSE

On Wednesday, the House gave final approval to the bill authorizing sports betting in North Carolina; it will now be considered by the Senate.

House Bill 347 specifies how gambling operators would be licensed, bets placed, and revenue taxed. The North Carolina Lottery Commission would be required to grant licenses for 10 to 12 interactive sports betting sites under the proposed legislation. Beginning early in 2024, those who are at least 21 will be able to wager on professional, collegiate, and Olympic-style athletics. In addition to winnings and other expenses, the state would levy a 14 percent privilege tax on operators' gross revenue.

After nearly two hours of passionate debate, the measure was approved by the House the next day. Following an additional hour of discussion and several failed amendments, the vote on Wednesday was 64-45. The bill has a good chance of passing the Senate, which passed a previous version of it in 2021. The opposition to the bill, which is primarily made up of social conservatives and some Democrats warning about the dangers of compulsive gambling, does not follow party lines in either chamber.

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VETO OF HANDGUN BILL OVERRIDDEN

In a first since 2018, the Republican-controlled legislature overrode Democratic Governor Roy Cooper’s veto on Wednesday, allowing North Carolina residents to purchase handguns without first obtaining a permit from their local sheriff.

The long-standing permit system requiring sheriffs to conduct character assessments and criminal history checks of pistol applicants was abolished by the House, which voted 71–46 to pass Senate Bill 41.

The permit repeal will take effect immediately. A national background check and a permit for carrying a concealed weapon are still required for anyone buying a pistol from a gun shop or a federally authorized dealer. In accordance with the new law, starting on December 1 firearms will also be permitted on some school grounds used for religious services. During school hours, when students are present for extracurricular activities, and when there are no students present, guns are prohibited on campus. Houses of worship may choose to make an exception by putting up signs. The new law also establishes and finances a free two-year campaign to raise awareness of the importance of safe firearm storage.

Republicans now have veto-proof margins in the Senate thanks to seat gains in the midterm elections, but they fell one seat short of a similar majority in the House. Representatives Tricia Cotham of Mecklenburg County, Cecil Brockman of Guilford County, and Michael Wray of Northampton County were the three Democrats who failed to vote on the override, according to the results of the House vote on Wednesday. This resulted in a margin large enough to satisfy the constitutional requirement. Republicans required at least one Democratic vote in their favor or as few as two Democratic votes in the negative. Democrats were irritated by Moore's parliamentary tactics on Wednesday when he prevented a floor debate before the vote.