N.C. Senate race offers barometer on Obamacare

During Sylvia Mathews Burwell's May confirmation hearing to become HHS secretary, Sen. Kay Hagan of North Carolina decried that her state had not expanded Medicaid and as a result roughly 500,000 residents do not have health coverage.

“These are some of the most vulnerable citizens in our society who will continue to seek care in emergency rooms and then will leave chronic conditions unmanaged, which we know is detrimental not only to their health, but certainly to the economy, too,” the first-term Democrat said.

Her comments were a rare instance of a Democratic senator in a tough re-election campaign defending the Patient Protection and Affordable Care Act, which she voted for in 2010. But it also highlighted the fact that Democrats, while still largely on the defensive about the healthcare law, have found ways to tout its accomplishments on the campaign trail. The expansion of Medicaid—which roughly half the states have enacted—is one major provision of the ACA that Hagan and other Democrats have rallied around as they face a difficult electoral climate in November.

Hagan has been bludgeoned by millions of dollars in TV ads attacking her support for the law. But there's a big political disconnect in her state, given that more than 350,000 North Carolinians have signed up for exchange coverage, one of the highest rates in the country. At every opportunity, her Republican opponent, state House Speaker Thom Tillis, gleefully reminds voters of Hagan's repeated promise that anyone who liked their insurance would be able to keep it under the law—a claim that turned out to be partly false.

“It's all about healthcare and Obamacare,” said Michael Bitzer, a political science professor at Catawba College in Salisbury, N.C. “It's the No. 1 bullet that the Republicans are going to use.”

Hagan has largely sought to shift the debate to other issues, criticizing Tillis for conservative policies enacted by the state Legislature since Republicans took control in 2010, such as tax cuts for affluent residents that Democrats say have hurt public schools. Tillis and the North Carolina Legislature passed legislation in 2013 rejecting Medicaid expansion to adults earning up to 138% of the federal poverty level. During the GOP primary, Tillis ran ads boasting of that decision. “It's not happening in North Carolina, and it's because of Thom Tillis,” a radio spot stated.

That's given Hagan a sound-bite-friendly topic on which to attack. “Speaker Tillis chose the special interests over what is best for North Carolina when he rejected Medicaid expansion that would have helped 500,000 North Carolin-ians,” said Chris Hayden, a Hagan campaign spokesman. “While Kay is focused on common-sense fixes to make the healthcare law work better for North Carolina, Speaker Tillis wants to take us back to a time when insurance companies could deny coverage to individuals with pre-existing conditions and charge women more than men for coverage.”

The North Carolina race is one of the most closely watched contests in the country. It's among a dozen nationwide that will determine control of the U.S. Senate in 2015. Assuming that Republicans hold the House, picking up six seats would give Republicans control of Congress and a stronger hand in seeking to hobble or roll back healthcare reform. Most political observers believe they would push to block funding of key ACA provisions and repeal provisions such as the individual and employer mandates, forcing the president to use his veto pen.

The pattern in other states with endangered Democratic incumbents is similar to what's happening in North Carolina. Republicans and their allies are bashing incumbents over their support for the law, while Democrats are largely trying to change the topic. But Medicaid expansion has been one area where Democrats have been on the offensive. Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, two states with high rates of uninsured working-poor people, have criticized state officials for failing to authorize expansion.

Norm Ornstein, a congressional scholar at the American Enterprise Institute, argues that Democrats are making a mistake by bunkering down and not forcefully defending the law. He criticized Democratic candidates in Senate races in Kentucky and Georgia for offering ambiguous responses when pressed about whether they would have voted for the law. Instead, he said, Democrats should be highlighting provisions of the ACA that are popular—such as prohibiting insurers from discriminating against individuals with pre-existing conditions—and pressuring Republicans to lay out an alternative. Medicaid expansion, in particular, is a potentially salient campaign issue for Democrats. “It is something that excites the Democratic base and doesn't turn off the rest of the state,” Ornstein said.

Implementation of the ACA has been a relative success in North Carolina. The state enjoyed some of the most robust enrollment in the country, with more than 350,000 individuals signing up for health plans, despite a state government largely hostile to enrollment education and sign-up efforts. That ranked North Carolina fifth in the country in terms of exceeding enrollment projections, according to an analysis by Avalere Health. Only two other states that didn't establish their own exchanges, Florida and Idaho, fared better. North Carolina has had among the highest rates of uninsured residents in the country, with roughly 20% lacking coverage from 2011 to 2012, according the North Carolina Institute of Medicine.

But canceled health plans in the individual insurance market also were a major problem in the state. According to the North Carolina Department of Insurance, more than 473,000 individuals saw their plans terminated by their insurance company because they didn't meet the coverage requirements of the ACA. While most of the individuals affected simply signed up for new plans, the cancellations continue to cause headaches for Hagan's campaign.

North Carolina's politics are not easily pigeonholed. The state has traditionally tilted Republican, but in recent years has developed a purple hue. In 2008, Barack Obama won the state by less than half a percentage point, the first time a Democratic presidential candidate prevailed in more than three decades. That same year, Hagan defeated incumbent Republican Sen. Elizabeth Dole by 8 percentage points.

Jennifer Duffy, senior editor of the Cook Political Report, attributes Hagan's victory largely to a perception that Dole was out of touch rather than to Hagan's appeal. “Voters don't really have a sense of who (Hagan) is,” Duffy said. “She hasn't really filled in the lines since she's been in office.”

In the ensuing six years, the state has shifted back to the right. In 2010, Republicans swept control of both North Carolina legislative chambers for the first time since the 19th century thanks to an extraordinary organizing effort by conservative businessman Art Pope, who is now the state budget director. Two years later, Republican Pat McCrory won the gubernatorial contest. And in the 2012 presidential contest, Obama lost to Mitt Romney by 2 percentage points.

The most recent polls have consistently shown Hagan in the lead, but by a margin of no more than 4 percentage points. The Rothenberg Political Report recently moved the North Carolina Senate race from a toss-up to tilt Democrat.

Nevertheless, the ACA remains unpopular in North Carolina. According to a New York Times Upshot/Kaiser Family Foundation poll conducted in April, 54% of respondents in North Carolina disapprove of the law. But 60% support improving the law rather than repealing it. And a survey released last month by Public Policy Polling showed that 53% of likely voters in North Carolina support Medicaid expansion, compared with 38% who oppose it.

That complicates matters for Tillis, said Jonathan Oberlander, a public health professor at the University of North Carolina. “If not Obamacare, what?” Oberlander asks. “His challenge is to say what (should be) in its place.”

Mark Schenck, the GOP chairman in Scotland County, N.C., also said Tillis needs to stake out a stance beyond repeal. “Never in my memory has there ever been any government program that has been discontinued after it's started,” Schenck said. “I don't think he's going to try to eliminate it all together. I can't see that happening. I think he realizes that.”

Tillis has called for repealing and replacing Obamacare. But beyond that he's offered few specifics about what policies he would support if elected.

Medicaid expansion could be the wild card in the election. Earlier this month, Gov. McCrory conspicuously left the door open to eventually backing some form of expansion. His mantra has been that the current program first must be reformed to ensure its long-term financial viability.

The North Carolina Hospital Association has been restrained in advocating for expansion and hasn't backed either candidate in the Senate contest.

Carter Wrenn, a veteran GOP political consultant in the state, questions whether Democrats can gain traction on the Medicaid issue, even if the public supports their stance. Polls have repeatedly shown that the general public lacks much understanding of the Affordable Care Act. “It gets fuzzed up pretty quickly,” Wrenn said.

How substantial a role healthcare will play remains to be seen. Political observers of all ideological stripes argue that views on Obamacare are so entrenched at this point that it's going to be impossible to move a substantial number of voters.

“When it comes to Obamacare, it's Sunnis and Shiites,” said Gary Pearce, a Democratic political consultant.

Follow Paul Demko on Twitter: @MHPDemko