A BILL TO BE ENTITLED
AN ACT to provide health coverage to residents of north carolina under the NC Health Care for working families program and to establish the North Carolina Rural Access to Healthcare grant program.
Whereas, there are 1,083,000 citizens in North Carolina who have no health insurance; and
Whereas, the majority of these uninsured individuals aged 19 to 64 are employed, but they are either not employed full‑time or are not making enough money to afford health insurance coverage; and
Whereas, the State is currently incurring the cost of care for these uninsured individuals as they seek uncompensated care at one of the North Carolina hospital emergency departments; and
Whereas, because these uninsured individuals cannot afford preventive care, they do not seek care until they are very ill and the cost of care is very high; and
Whereas, these uninsured individuals lose time on the job, often become chronically ill, and may suffer advanced or even terminal illness because they are unable to afford early care; and
Whereas, the State has the opportunity to develop and implement a unique, carefully controlled program to address this coverage gap; and
Whereas, the North Carolina model addressing this coverage gap will include a work requirement for participants; and
Whereas, the North Carolina model addressing this coverage gap will be paid for with a combination of participant premiums, intergovernmental transfers, current hospital assessments, gross premiums tax revenue, newly enacted hospital assessments, and federal funds; and
Whereas, the North Carolina model addressing this coverage gap will not increase the cost to consumers or tax payers as a result of the increased gross premiums tax revenue and the new hospital assessment; and
Whereas, federal law directs that the federal share for the North Carolina model addressing the coverage gap is ninety percent (90%) for calendar year 2020 and each year thereafter under 42 U.S.C. § 1396d(y)(1)(E); and
Whereas, the North Carolina model addressing this coverage gap will not add to the national debt; Now, therefore,
The General Assembly of North Carolina enacts:

part I. Nc health care for working families.
SECTION 1.  NC Health Care for Working Families. – It is the intent of the General Assembly to facilitate the design of a health care program that addresses the needs of citizens of North Carolina committed to a healthy lifestyle who are ineligible for Medicaid due to their income levels, but who are otherwise unable to afford health insurance. To meet these needs, the Department of Health and Human Services (DHHS) shall design a program to be known as "NC Health Care for Working Families." DHHS is encouraged to advocate to the federal government for any changes to the current operations of the Medicaid program at the federal level as may be needed to obtain approval for the program with the maximum federal financial participation possible. In designing the NC Health Care for Working Families program, DHHS shall comply with the components of the program outlined in this act and shall have the authority to determine specific details relating to each of the program components.
SECTION 2.  Population to be covered. – The Department of Health and Human Services shall provide NC Health Care for Working Families program coverage to residents of North Carolina who meet all of the following criteria:
(1)	The resident meets all federal Medicaid citizenship and immigration requirements.
(2)	The resident is not eligible for Medicaid under the currently established North Carolina Medicaid program eligibility criteria.
(3)	The resident's modified adjusted gross income (MAGI) does not exceed one hundred thirty‑three percent (133%) of the federal poverty level.
(4)	The resident is not entitled to or enrolled in Medicare Part A or Medicare Part B benefits.
(5)	The resident is an adult who is no younger than age 19 and no older than age 64.
In defining residency for the purposes of eligibility for the NC Health Care for Working Families program, the Department of Health and Human Services shall do so in a manner consistent with the residency requirements under North Carolina's Medicaid State Plan.
SECTION 3.  Health care coverage. – The benefit package designed by the Department of Health and Human Services (DHHS) shall be similar to the coverage provided under North Carolina's 2017 Essential Health Benefits Benchmark Plan and the Blue Cross and Blue Shield of North Carolina Blue Options Preferred Provider Organization (PPO) Plan and shall comply with applicable federal requirements governing Alternative Benefit Plans. The benefit package designed by DHHS shall also focus on preventive care and participant wellness. Prepaid Health Plans, as defined under G.S. 108D‑1, shall manage the benefits for the population covered by the NC Health Care for Working Families program through capitated contracts.
SECTION 4.  Participant contributions. – NC Health Care for Working Families program participants shall pay an annual premium, billed monthly, that is set at two percent (2%) of the participant's household income. Participant contributions shall be utilized to fund the program as required by Section 7 of this act. Failure of a program participant to make a premium contribution within 120 days of its due date shall result in the suspension of the program participant from the program unless that program participant shows that he or she is exempt from the premium requirements prior to the expiration of that 120‑day period. An individual who was suspended from the program for nonpayment of the monthly premium may reactivate coverage if that individual meets the eligibility requirements and pays the total amount in previously unpaid premiums owed by the individual. The Department of Health and Human Services (DHHS) shall adopt rules related to premium requirements, including exemptions from the requirements. Exemption from the premium requirements shall include only the following criteria:
(1)	The participant's household income is below fifty percent (50%) of the federal poverty guidelines.
(2)	The participant has a medical hardship.
(3)	The participant has a financial hardship.
(4)	The participant is an Indian Health Services beneficiary.
(5)	The participant is a veteran in transition but actively seeking employment.
DHHS shall develop cost‑effective methods of accepting participant contributions that facilitate the ability of participants to make the required contribution. DHHS shall take into consideration the methods of payment utilized by Indiana to accept Personal Wellness and Responsibility (POWER) account payments under its Healthy Indiana Plan.
SECTION 5.  Program requirements. – In addition to the monthly premium contributions required by Section 4 of this act, the NC Health Care for Working Families program shall include the following requirements:
(1)	Co‑payments. – Co‑payments under the program shall be comparable with the co‑payments applied under the North Carolina Medicaid State Plan.
(2)	Preventive care and wellness activities. – To promote health and wellness, the Department of Health and Human Services shall establish preventive care and wellness activities. Preventive care and wellness activities shall include routine physicals, immunizations, routine screenings such as mammograms and colonoscopies, and weight management programs, as medically appropriate for the individual participant.
(3)	Mandatory employment activities. – To increase employment, the Department of Health and Human Services shall establish employment activities for program participants that adhere to federal guidance and are aligned with the work requirements of the Able‑Bodied Adults Without Dependents (ABAWDs) policy under the Supplemental Nutrition Assistance Program as much as possible, provided that exemptions from mandatory employment activities shall be limited to the following individuals:
a.	Individuals living in the home with, and serving as the primary caregiver for, a dependent minor child; a disabled or medically frail adult child; or a disabled parent, disabled spouse, or other disabled and medically frail relative.
b.	Individuals who are in active treatment for a substance abuse disorder.
c.	Individuals determined to be medically frail or with an acute medical condition that would prevent the individual from complying with the employment requirements.
d.	Pregnant and postpartum women.
e.	Indian Health Services beneficiaries.
f.	Any other category of individuals required to be exempt by the Centers for Medicare and Medicaid Services.
SECTION 6.  Defined measures and goals. – The NC Health Care for Working Families program shall be built on defined measures and goals for risk‑adjusted health outcomes, quality of care, patient satisfaction, access, and cost. Each component shall be subject to specific accountability measures, including penalties. The Department of Health and Human Services may use organizations such as the National Committee for Quality Assurance (NCQA), the Physician Consortium for Performance Improvement (PCPI), or any others necessary to develop effective measures for outcomes and quality.
SECTION 7.  Funding. – The following three sources shall be the only sources of funding for the NC Health Care for Working Families program:
(1)	Federal funds. – The Department of Health and Human Services is required to seek the highest federal financial participation percentage available to fund the program.
(2)	Participant contributions. – Participants in the program shall make monthly premium payments as required by Section 4 of this act.
(3)	State and county funds. – The State and county share of costs that are not covered by federal funds or participant contributions will be funded through intergovernmental transfers, gross premiums tax revenue, and hospital assessments. It is the intent of the General Assembly that all State funds needed for the program shall be generated through increased revenue from the gross premiums tax, hospital assessments, and intergovernmental transfers, as well as new revenue from an additional hospital assessment that the General Assembly intends to enact to meet the requirements of this act.
SECTION 8.  Submission of State Plan amendments and implementation time line. – The Department of Health and Human Services shall submit all State Plan amendments and modifications to the 1115 demonstration waiver for Medicaid transformation as necessary to implement coverage under the NC Health Care for Working Families program required by this act. Subject to the contingencies in Section 9 of this act, coverage for newly eligible adults under this act shall begin no later than the earlier of the following:
(1)	One hundred twenty days after the approval by the Center for Medicare and Medicaid Services of all State Plan amendments or amendments to the 1115 demonstration waiver submitted under this Section.
(2)	July 1, 2020.
SECTION 9.  Implementation and program continuation contingencies. – The State shall not be bound to provide coverage under the NC Health Care for Working Families program. Coverage under the NC Health Care for Working Families program shall not be implemented or shall be terminated if any of the following occurs:
(1)	If the program approved by the Center for Medicare and Medicaid Services (CMS) fails to materially comply with the program components required by this act, including the participant contributions authorized under Section 4 of this act or any of the program requirements authorized under Section 5 of this act, then the NC Health Care for Working Families program shall not be implemented and the Department of Health and Human Services (DHHS) shall stop all activities related to implementation. If the State is enjoined, stayed, or otherwise prohibited from implementing any program component approved by CMS, then DHHS shall not provide NC Health Care for Working Families program coverage until all program components can be implemented.
(2)	If legislation necessary to ensure that the State and county share of costs that are not covered by federal funds, participant contributions, or increased gross premiums tax revenue will be funded through a new hospital assessment is not enacted, as required by subdivision (3) of Section 7 of this act, then the NC Health Care for Working Families program shall not be implemented and DHHS shall continue to seek federal approval of the program if approval has not already been given, but shall stop all other activities related to implementation until the necessary legislation is enacted.
(2a)	If legislation necessary to ensure that the premiums tax levied under G.S. 105‑228.5 applies to capitation payments received by Prepaid Health Plans, as defined in G.S. 108D‑1, in the same manner in which the tax is applied to the gross premiums from business done in this State for all other health care plans and contracts of insurance provided by insurers or health maintenance organizations subject to the tax is not enacted, then the NC Health Care for Working Families program shall not be implemented and DHHS shall continue to seek federal approval of the program if approval has not already been given, but shall stop all other activities related to implementation until the necessary legislation is enacted.
(2b)	If the program approved by the Center for Medicare and Medicaid Services (CMS) does not allow for participant contributions collected by the State to be treated as State funds eligible for federal matching funds, then the NC Health Care for Working Families program shall not be implemented and DHHS shall stop all activities related to implementation.
(3)	If the combination of funding sources identified in Section 7 of this act is not sufficient to initially fund or to provide a sustainable funding source to cover all costs of the program, then the NC Health Care for Working Families program shall not be implemented and DHHS shall stop all activities related to implementation.
(4)	If the Federal Medical Assistance Percentage (FMAP) for services provided through the program is less than ninety percent (90%), then the NC Health Care for Working Families program shall not be implemented and DHHS shall stop all activities related to implementation.
(5)	If, after the implementation of the program, the Federal Medical Assistance Percentage (FMAP) for services provided through the NC Health Care for Working Families program falls below ninety percent (90%), then, upon receipt of information indicating that the FMAP will be lower than ninety percent (90%), the Secretary of DHHS shall promptly provide notice of the change in the FMAP to the Chairs of the Joint Legislative Oversight Committee on Medicaid and NC Health Choice and to the Fiscal Research Division. Coverage under the NC Health Care for Working Families program shall terminate on the last day the FMAP is ninety percent (90%) or greater.
(6)	If, after implementation of the program, the combination of funding sources identified in Section 7 of this act is no longer sufficient to fund or provide a sustainable funding source to cover all costs of the program, then coverage under the NC Health Care for Working Families program shall terminate on the last day of the fiscal year in which the funding is no longer sufficient.
SECTION 10.  Report. – No later than March 1, 2020, the Department of Health and Human Services (DHHS) shall submit to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice a report with a design proposal for the NC Health Care for Working Families program. The report shall contain a strategy for obtaining approval for federal funding for the program. The report shall include the Federal Medical Assistance Percentage (FMAP) sought by DHHS and an analysis of the fiscal impact to the State that would result from the proposal. The report shall also include long‑term strategies to fund the NC Health Care for Working Families program in such a way that the sources of funding identified in Section 7 of this act remain the only sources of funding for the program. As part of its report, DHHS shall submit a copy of any draft demonstration waiver under Section 1115 of the Social Security Act, and any draft modifications to the 1115 demonstration waiver for Medicaid transformation, necessary to effectuate the NC Health Care for Working Families program.
SECTION 10.1.  Quarterly reports. – Beginning October 1, 2020, and ending after the initial approval term of the approval by the Centers for Medicare and Medicaid Services of the NC Health Care for Working Families program, the Department of Health and Human Services (DHHS) shall quarterly publish the following information on its Web site:
(1)	The estimated number of individuals eligible to participate in the NC Health Care for Working Families program.
(2)	The number of individuals who are participating in the program for that quarter.
(3)	Demographic data, including race, gender, and socioeconomic status, as determined by DHHS, for individuals that are participating in the program for that quarter. No personally identifiable information shall be published.
(4)	Comparative data, including the demographics outlined in subdivision (3) of this section, comparing the population that is eligible for participation in the NC Health Care for Working Families program with the population that is actually participating in the program.

part II. The North Carolina Rural Access to Healthcare grant program
SECTION 11.(a)  The title of Chapter 108B of the General Statutes is renamed to be "Community Action Programs and Rural Health Grants."
SECTION 11.(b)  Chapter 108B of the General Statutes is amended by adding a new Article to read:
"Article 3.
"Rural Access to Healthcare Grants.
"§ 108B‑30.  Definitions.
The following definitions apply in this Article:
(1)	Fund. – North Carolina Rural Access to Healthcare Grant Fund.
(2)	Office of Rural Health. – Department of Health and Human Services, Division of Central Management, Office of Rural Health.
(3)	Qualified applicant. – An individual or entity that meets criteria for applying for funds distributed under the Rural Access to Healthcare Grant Program, as established by the Office of Rural Health.
"§ 108B‑31.  Rural Access to Healthcare Grant Fund.
(a)	Establishment. – The North Carolina Rural Access to Healthcare Grant Fund is established as a special fund in the Department of Health and Human Services, Division of Central Management, Office of Rural Health. The fund may receive funds appropriated by the General Assembly and any gifts, grants, or donations from any public or private source.
(b)	Purposes. – Funds in the North Carolina Rural Access to Healthcare Grant Fund shall be used, as available, to address the health care needs of citizens residing in the rural areas of this State.
(c)	Statutory Appropriation. – An appropriation under this section is a statutory appropriation as defined in G.S. 143C‑1‑1(d)(28). When developing the base budget, as defined by G.S. 143C‑1‑1, the Director of the Budget shall include the following appropriations to the North Carolina Rural Access to Healthcare Grant Fund:
(1)	For the 2020‑2021 fiscal year, twenty‑five million dollars ($25,000,000).
(2)	For the 2021‑2022 fiscal year, thirty million dollars ($30,000,000).
(3)	For the 2022‑2023 fiscal year and every fiscal year thereafter, fifty million dollars ($50,000,000).
"§ 108B‑32.  Rural Access to Healthcare Grant Program.
(a)	Any qualified applicant may apply for a grant from the Fund for any eligible activity. Eligible activities may include the following:
(1)	Health care provider recruitment to rural areas of the State.
(2)	Loan forgiveness programs or activities for health care providers practicing in rural areas of the State. Any loan forgiveness programs or activities must be administered by the Department of Health and Human Services, Division of Central Management, Office of Rural Health.
(3)	Rural health care provider retention incentive programs.
(4)	Expansion of telehealth into rural areas of the State.
(5)	Programs that enhance and modernize medical technology utilized in rural areas of the State.
(6)	New clinical patient services for patients in rural areas of the State.
(7)	Activities that address and combat the abuse of opioids by citizens in rural areas of the State.
(8)	Infant mortality reduction efforts.
(9)	Modernization of health information technology systems in rural areas of the State.
(10)	Expansion of mental health services into rural areas of the State, including crisis services.
(11)	Activities that reduce or eliminate health disparities.
(b)	The Office of Rural Health shall specify the form and the contents of the application for a grant from the Fund, including procedures for the submission of applications electronically.
(c)	The Office of Rural Health shall determine the meaning of the term "rural" as it applies to grants under this Article and shall define the term in a way that is consistent with the use of the term as it relates to other programs within the Office of Rural Health.
(d)	No single grant award from the Fund shall exceed one million dollars ($1,000,000) per year.
(e)	A recipient of a grant from the Fund may reapply for an additional grant under this section annually but shall be limited to a reapplication period of five years from the date the first grant award was made to the recipient.
(f)	In awarding grants, the Office of Rural Health shall consider the availability of other funds for the applicant, including whether the applicant is receiving a Community Health Grant, the incidence of poverty in the area addressed by the grant, and the number of individuals impacted by the eligible activity of the applicant.
(g)	The Office of Rural Health shall require grant recipients to report on objective, measurable quality health outcomes to the Office of Rural Health on an annual basis so long as the grantee is continuing to receive funds.
"§ 108B‑33.  Rule‑making authority.
The Office of Rural Health shall adopt rules to implement this Article."
SECTION 11.(c)  The funds appropriated to the North Carolina Rural Access to Healthcare Grant Fund under G.S. 108B‑31, as enacted under subsection (b) of Section 11 of this act, are intended to represent a portion of the amount of revenue from the gross premiums tax that is attributable to capitation payments received by Prepaid Health Plans as a result of the implementation of the NC Health Care for Working Families program required by Part I of this act. Therefore, this section is effective only if legislation necessary to ensure that the premiums tax levied under G.S. 105‑228.5 applies to capitation payments received by Prepaid Health Plans, as defined in G.S. 108D‑1, in the same manner in which the tax is applied to the gross premiums from business done in this State for all other health care plans and contracts of insurance provided by insurers or health maintenance organizations subject to the tax is enacted.
SECTION 12.  Except as otherwise provided, this act is effective when it becomes law.