By Jaymie Baxley, Rose Hoban and Grace Vitaglione
The Healthy Opportunities Pilot, a Medicaid program that addressed the nonmedical health needs of low-income North Carolinians, will cease operations July 1, according to an announcement obtained by NC Health News.
The first-in-the-nation effort that has drawn national attention and praise was launched in 2022 and has provided assistance to nearly 30,000 people across three largely rural regions of the state. Beneficiaries received deliveries of food, rides to doctor’s appointments and other services designed to combat the social, economic and geographic factors that keep people on Medicaid from getting and staying healthy.
An independent evaluation delivered to lawmakers this past winter also showed that the program was starting to save money on some of the more expensive beneficiaries in Medicaid.
But spending plans proposed by the North Carolina House of Representatives and the Senate effectively cut funding for the program.
While the two chambers still have to hash out a final budget due by June 30, the state Medicaid head, Jay Ludlam, told program partners in a letter Monday that it would be fiscally irresponsible to continue the program without secured funding — risking “unpaid costs and broader system instability.”
Ludlam shared additional details with the program’s stakeholders in a conference call on Monday afternoon. In an interview with NC Health News, he said they expressed “disappointment” with the decision.
“I think they’re disappointed, in part, because they understand and see every day the impact that this program is having on the people that they serve,” he said. “They know what we’ve built together, and what we risk losing if we’re unable to find funding.”
Rep. Donny Lambeth (R-Winston Salem) said the budget was too tight this year to continue funding the pilot program. In a text to NC Health News, he also said lawmakers haven’t seen enough “valid justification” to show the benefits outweigh the $175 million cost of the program for the next two years.
Initial results showed savings
Thirty-three of the state’s 100 counties were included in the pilot.
The program was created through a waiver, approved by the Centers for Medicare and Medicaid Services during the first Trump administration, that allowed the N.C. Department of Health and Human Services to use federal Medicaid funds — usually earmarked for medical expenses — to address needs such as food, transportation and housing.
The N.C. General Assembly had to agree to match federal funding for the program.
Lambeth said the concept of Healthy Opportunities is “really good,” but that he hasn’t seen compelling evidence of the cost savings the program promises to create.
An independent evaluation showed the pilots have driven down the cost of health care by as much as $1,020 each year for each Medicaid beneficiary who’s participating in the pilot — largely by helping people stay healthy. That’s because program participants were prevented from becoming sicker or from using more expensive kinds of care.
The researchers wrote in JAMA in February that “results of this study suggest that the HOP program was associated with increased spending at enrollment, followed by a subsequently lower spending trend.”
The most-utilized services were for beneficiaries to receive a food box, a “prescription” for fruits and vegetables, or help with finding or maintaining housing.
Participation in the program has also been “associated with decreased emergency department utilization,” according to the report, which was completed by researchers from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
Information showing the positive impact of HOP was being shared with state officials as recently as last Friday, when the program was highlighted as part of a symposium in Raleigh.
During the event, Seth Berkowitz, an associate professor at the UNC School of Medicine, said emergency department visits and adult hospitalizations have been “significantly reduced” across the three pilot regions. He said the program has also led to decreased health care expenditures, with the state saving about $85 a month per participant.
“We know that non-medical factors frequently undermine what would be otherwise successful health care,” Berkowitz said. “For example, when someone doesn’t have healthy food to eat, the diabetes medicines that would control blood sugar can’t really do their job, and an asthma inhaler isn’t going to be as effective if a child with asthma is living in moldy, dilapidated housing.”
Reactions
Three agencies facilitated services for program participants in the pilot regions. These organizations — Access East, Community Care of the Lower Cape Fear and Impact Health — acted as intermediaries, coordinating the distribution of goods and services through a network of more than 140 nonprofits and community partners.
The state will continue to pay the agencies through September to “wind down” the program, Ludlam said.
“We hope that we’re able to continue to work with the General Assembly to help them understand maybe more clearly the impact of this program on health and the positive budget impact it has on North Carolina,” he said. “Hopefully, we can convince them to get this program back in the budget, but we’ll continue to work with the network leads through at least the next couple of months, and then reassess where we’re at then and how much funding is needed to just continue.”
Laurie Stradley, CEO of Impact Health, said the program’s demise would negatively affect the more than 60 community organizations that partnered with her agency to provide services across 18 counties in western North Carolina.
“It’s really important to us, and I know my colleagues in the other parts of the states feel this way too, that being a part of this pilot doesn’t cause harm to those organizations and make it harder for them to meet their missions,” she said. “This sort of turn on a dime is going to be really hard on them in terms of making their budgets and supporting their staff and delivering food or housing or home repairs — whatever it is that’s really core to their mission that drew them into the Healthy Opportunities Pilot.”
The agency, she added, is “committed to leveraging every dime we have available and to seeking other funding to ease that transition” for the organizations.
Participation in Healthy Opportunities in the western part of the state grew in the aftermath of Hurricane Helene, which displaced many families in the region.
Rep. Eric Ager (D-Fairview), who represents part of western North Carolina, said Healthy Opportunities made a huge impact during and right after the storm. The program already had lists of those who had been receiving food deliveries and might need help.
He’s heard from constituents worried about the loss of the program, as it allowed them access to food and services they otherwise couldn’t afford. The pilot project helped local farmers sell wholesale food that was provided to people who might have had to instead get their groceries at a convenience store, where the food wouldn’t be as healthy, he said.
“Instead we’re going to pay more for worse [health] outcomes,” Ager said.
Rep. Rodney Pierce (D-Roanoke Rapids) said that in his district, the pilot gave people access to fresh fruits and vegetables. (One out of four children is food insecure in northeastern N.C.)
“This is something that literally saves lives and extends lives,” Pierce said.
He and other Democratic lawmakers asked DHHS to provide them with evidence of the program’s benefits so they can make the case for continuing funding to their Republican colleagues. Pierce said it was disappointing that the program was cut after only three years of operating.
“You haven’t really given it a chance to show what it can do. I think you have to give it at least five years to see if it’s fruitful,” he said.
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