Health Care Policy and Nonprofits

Last updated: July 28, 2020

Rising health care costs are one of the biggest challenges for nonprofits and many of the communities and individuals they serve. Consequently, policies that would close systemic gaps in availability of quality health coverage - such as Medicaid expansion and improved options for employer-provided health insurance - are important to the nonprofit sector.


Medicaid Expansion

Currently, nearly half a million North Carolinians have incomes which are too high to qualify for Medicaid but do not have enough money to purchase their own private health insurance or to receive federal support to help pay for health coverage. With ever-rising health care costs, these North Carolinians in the coverage gap are turning more and more to nonprofits to meet many of their basic needs, such as health care, food, housing, and childcare. This problem exists because North Carolina remains one of final states that has declined the Affordable Care Act's option to expand Medicaid eligibility to many adults in this coverage gap.

  • What didn’t happen in 2020:
    • The NC General Assembly did not take up legislation to close the coverage gap (H.B. 655) this year. Governor Cooper has been clear that Medicaid expansion is one of his top priorities.
  • What comes next:
    • It is possible that legislators could vote on Medicaid expansion next year.
  • Nonprofits’ role:
    • A broad coalition of nonprofits has been advocating for the past two years for legislators to close the health insurance coverage gap. Without the coordinated, strategic advocacy of these nonprofits, it is unlikely that the House would have gotten as close as it did to passing bipartisan legislation to adopt a form of Medicaid expansion in North Carolina.


Medicaid Transformation 

For several years, legislators and the NC Department of Health and Human Services (DHHS) have been attempting to convert the state’s Medicaid system to a managed care program (that emphasizes value-based care known as Medicaid transformation). Ultimately, Medicaid transformation should help continue the trend of heath care organizations working more closely with nonprofits that are focused on the social determinants of health.

  • What happened so far in 2020:
    • Legislators approved a plan (S.808) for DHHS to begin Medicaid transformation on July 1, 2021.
  • What comes next:
    • DHHS will resume its process of transitioning North Carolina’s Medicaid system to managed care with the goal of having the new system in place by July 1, 2021. It will be important for nonprofits to continue to provide input to DHHS during this process.
  • The Center’s role:
    • Last year, the Center offered a listening tour to get nonprofits’ input on the ways that Medicaid transformation will affect the people served by their organizations. The Center will offer more training opportunities for nonprofits as DHHS moves forward with its plans for Medicaid transformation over the next 12 months.


Association Health Plans

A state law enacted in August 2019 creates standards for association health plans (AHPs) in North Carolina. Currently, the NC Department of Insurance is not approving AHPs, which are ways for nonprofit associations to negotiate more affordable health insurance for multiple employers with some type of commonality of interest. Potentially, AHPs could create opportunities for nonprofits to offer more affordable, high-quality health insurance for their employees. However, nonprofit health advocates have expressed concerns that AHPs have the potential to create higher health care costs for some workers.

The Center has heard from many nonprofits that are interested in the creation of an association health plan open to employees of North Carolina nonprofit organizations. To help nonprofits understand more about association health plans, the Center has posted an updated analysis of the pros and cons of AHPs for the nonprofit sector.