In 2022, North Carolina launched an experimental initiative to address the nonmedical health needs of low-income residents by using Medicaid dollars.
This first-in-the-nation effort, known as the Healthy Opportunities Pilot, has provided assistance to nearly 30,000 people across three largely rural regions of the state. Beneficiaries get deliveries of food, rides to doctor’s appointments and other services that are designed to combat the various social, economic and geographic issues that contribute to health disparities.
Only 33 of the state’s 100 counties are included in the pilot, but more communities could be covered if lawmakers vote to expand it.
The $650 million pilot was created through a waiver, issued by the Centers for Medicare and Medicaid Services, that allowed the N.C. Department of Health and Human Services to use federal Medicaid funds — usually earmarked for medical expenses — to address needs like food, transportation and housing. During the final weeks of the Biden administration, CMS approved a waiver extension that gives the department the option of taking the program statewide.
Kody Kinsley, the former NCDHHS secretary who spearheaded the program’s rollout, said expanding the initiative will require the blessing of the N.C. General Assembly, which must agree to match whatever funding is ultimately provided by the federal government.
Still, he believes the results will justify the investment. Early research shows the state is spending about $85 less in medical costs per month for each person participating in the pilot. Participation in the program has also been “associated with decreased emergency department utilization,” according to a report from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
“This is something worth doubling down on,” Kinsley said in a recent interview with NC Health News. “It’s a huge investment for the federal government, but it’s also a huge affirmation that our strategy is working.”
While the waiver extension allows the pilot to continue through 2029, the new administration in Washington has Medicaid cuts in its sights — making the program’s future far from secure.
Boosting small businesses
Three agencies facilitate services for program participants in the pilot regions. These organizations — Access East, Community Care of the Lower Cape Fear and Impact Health — act as intermediaries, coordinating the distribution of goods and services through a network of more than 140 nonprofits and community partners.
Laurie Stradley, executive director of Impact Health, said the Healthy Opportunity Pilot is unique in that it was offered in rural areas of the state first, which is “not always the norm for pilot programs.” Her agency is the largest of the three network leads, covering 18 counties across the mountainous western wedge of North Carolina.
She said the pilot has had a “ripple effect” on the region’s economy. For example, the food participants receive through the program is often purchased from local growers.
“We’ve heard from some of our produce providers and some of the farms themselves that Healthy Opportunities allows them to make plans and have a market to sell their fresh local produce in a way that is more consistent than some of their other marketplaces,” she said. “They know that they’re going to get a consistent order from the nonprofits we work with.”
That weekly box of food has a ripple effect in the local economy in other ways.
“We had one mother say, ‘You know, because I know that food box is coming on Friday, I feel safe paying my rent on Wednesday,'” Stradley said. “Because she knows her family is going to eat, she can safely make that investment, which instantly improves her health stability and prevents her from getting behind in rent.”
Families in the program can also then redirect their dollars to paying utilities. Utility shutoffs are a common cause of people being evicted from their apartments, Stradley explained.
“If you know the power gets turned off, landlords are not often going to allow folks to stay in that space,” she said. “So when we can help people get up to date on their utilities, then they’re also more likely to be able to stay housed.”
But there’s got to be somewhere for people to live in the first place, which was difficult in western North Carolina even before the remnants of Hurricane Helene ravaged the housing stock.
A lifeline after disaster
Participation in the Healthy Opportunities Program grew in the aftermath of Helene, which displaced many families in the region.
“The folks that were already receiving some degree of services are finding that they have more needs,” Stradley said. “Then we also have folks who are newly eligible for Medicaid and the Healthy Opportunities Pilot because they’ve lost jobs or housing or other points of stability in their home lives that have increased demand for HOP services.”
At the same time, the disaster made it harder to provide services — housing in particular.
“Formerly, we were doing housing navigation and support for a slice of the regional population, but now we have hundreds of families competing for spaces because their housing has been damaged or lost,” Stradley said. “So it’s also harder for those folks who are already eligible to get access to some of the services like home repairs, for example, because our contractors in this region are flat out of availability.”
Housing has long been one of the most difficult needs to meet in western North Carolina, owing in large part to the region’s scant inventory of homes and dearth of affordable rental options.
“In the early days and the early allowances for healthy opportunities and housing, we really focused on people who were in unstable situations or unhoused,” Stradley said. “What we’re recognizing is that we need more emphasis on keeping people housed through things like home repairs and remediation.”
She offered the example of a family that has a young child with asthma.
“They get home from school and by after-dinner time they’re starting to have some trouble breathing and starting to have an asthma attack — and they’re going to wind up in the emergency room,” she said.
The Healthy Opportunities Pilot can help that family tackle the environmental triggers in the house — such as mold, a common problem in the mountains. The family can get as much as $2,900 to address those issues, which is about the cost of one emergency room visit.
“There’s a program in that called Breathe Right that helps to remove any moldy carpet or other mold mitigation that needs to happen in the house, and brings in filters to systems and vacuums that have a HEPA filter on them, hypoallergenic covers for pillows and all those sorts of things,” Stradley said. “And then the child will see a great decline in emotional, environmental triggers. And then they’re not going to the emergency room, [instead] staying in school, all those good things.”
Despite the challenges, Stradley said she’s excited about the possibility of the pilot expanding to other parts of the state.
“We’re already seeing indications that if we don’t spend these funds on food and housing and transportation, we are going to spend these funds on clinical care, diagnosis and long-term health care,” she said. “The more we can invest in making sure that young people have a safe place to sleep and healthy food to eat means that they are more likely to grow up and grow out of these programs.”
Model for the nation
The pilot is one of the first large-scale tests of whether providing nonmedical services can boost health outcomes and cut health care costs, and its results could inform Medicaid policies in other states.
“What every other state has done is really taken one specific domain and leaned in really hard,” Kinsley said, noting that initiatives in other states have focused exclusively on needs like food or housing. “North Carolina has the widest list of services that can be paid for with these types of Medicaid dollars.”
The early success of the pilot, he added, has “given the federal government confidence that we can take this statewide and continue to push forward.”
Kinsley’s successor, NCDHHS Sec. Devdutta Sangvai, supports expanding the program to other regions of the state, but he said that’s not going to happen overnight.
“We have this waiver now, which gives us options, and now we have to think about how we exercise the options that CMS has given us,” he said. “It’ll definitely require partnership with the General Assembly to understand where those priorities are.”
“The challenge,” he added, “is we’re not going to be able to do everything all at once, and we’re not going to be able to do it at 100 percent all at once.”
In the coming months, Sangvai said, he hopes to build consensus around the program, which faces an uncertain future under the new presidential administration.
Trump has said little about his plans for Medicaid, but many of his cabinet appointees have signaled interest in cutting funding for the program — a move that would make pilot expansion a tougher sell for state lawmakers and force them to prioritize medical expenditures.
Stradley hopes that won’t happen. She believes the pilot could “become more effective and more efficient” if it’s allowed to grow.
“There will be so much more opportunity for collaboration and coordination and reduction in the sort of administrative and overhead costs that come with the early stages of a pilot,” she said. “We hear all the time that all eyes are on us, for those of us doing this work in North Carolina, and it’s true. We really are shaping the way that this can be done, and other states are going to learn from us.”
This article first appeared on North Carolina Health News and is republished here under a Creative Commons license.
