In an end to the will-they-won’t-they drama of the past several years, lawmakers in North Carolina yesterday announced they’d reached a deal to expand Medicaid in the Old North State. For the past decade, North Carolina lawmakers have repeatedly proposed Medicaid expansion. Yet, just as it has been in every previous legislative session, Medicaid expansion is a terrible idea.
The 2010 Affordable Care Act, commonly known as Obamacare, enticed states to expand Medicaid to able-bodied adults with increased federal tax dollars. Since then, 39 states have taken Washington’s bait. Fortunately, North Carolina held out.
“Medicaid expansion would mean $500 million a month for NC,” stated a recent headline. If that wishful optimism sounds familiar, it’s because it is.
Back in 2012, the U.S. Department of Health and Human Services estimated the cost of Medicaid expansion would be around $4,000 per person by 2018. Yet it ended up being $6,100 — over 50% higher than promised.
Enrollment in Medicaid is 160% higher than promised. Illinois, for example, saw expansion cost the state $4.6 billion more than expected in the first two years. The expansion states got the short end of the stick, and it will only get worse. Medicaid is eating up more and more state budgets.
So, how much could North Carolina expect to pay? The Foundation for Government Accountability estimated that our state would end up with $7.7 billion in additional costs from expansion, but only $1.7 billion in additional funds from the federal government over ten years. That $6 billion shortfall will inevitably come from our state’s general fund taking money away from roads, schools, and police.
There is, however, another option. According to Pew, “a number of states also report using new or increased provider taxes and fees to help fund the expansion.”
A tax hike in the midst of 7% inflation? No thanks.
Perhaps these higher costs could be justified if Medicaid expansion saved lives. Unfortunately, that isn’t the case. A new National Bureau of Economic Research paper looked at Medicaid expansion and previous decades of state expansions prior to Obamacare.
“We find no evidence that Medicaid expansion reduces any of the four mortality measures in any individual state or across all treated states as a whole,” the authors conclude.
One reason is, many people who would be covered by Medicaid through expansion already have access to health care and insurance. In North Carolina, 63% of the newly eligible Medicaid recipients already have private insurance, and 35% have insurance offered by their employers. Medicaid expansion would shift these health care costs to taxpayers and, in the process, discourage employment among able-bodied working-age adults who would now receive free government health care. On top of our present labor shortage, this work disincentive could be catastrophic.
Medicaid expansion also creates hurdles to healthcare from the most vulnerable among us. Consider that Medicaid wait lists for home or community-based care have grown in states that have expanded the program. Nearly 22,000 people on wait lists in expansion states have died while waiting for care, and the average wait time has reached as high as 7.5 years in Maryland and 10.2 years in New Mexico. Those in most need are unable to get care as Medicaid expansion adds millions more to the Medicaid rolls. Medicaid expansion only further compounds the program’s current problems, making reform much more difficult in the future.
A better way to reduce costs and increase access to healthcare for North Carolinians is through a Personal Option. This proposal would remove barriers that stand in the way of quality healthcare, such as certificate-of-need (CON) laws that require hospitals and other healthcare facilities to get government approval before expanding their facilities. Unfortunately, lawmakers have rejected a full-scale repeal of North Carolina’s certificate of need law in brokering their agreement to expand Medicaid.
A recent Americans for Prosperity Foundation study found that North Carolina’s CON laws have denied $1.5 billion in healthcare investment. These denials have led to monopoly markets, such as in Western Carolina, raising prices and lowering care options for consumers. North Carolina should pass S.B. 48 to remove these ridiculous and nonsensical limitations.
The Personal Option would also empower more qualified healthcare practitioners to treat more patients. Expanding the category of services that certain healthcare practitioners, such as nurse practitioners, can provide would be a game-changer for consumers.
Researchers at the Center for Growth and Opportunity at Utah State University have documented “substantial empirical evidence that an expanded scope of practice for health workers would not endanger patients and that it could reduce healthcare costs.” In light of an existing physician shortage that the American Medical Association says will only worsen, this is a critical solution. Again, lawmakers rejected including the SAVE Act in their agreement.
Healthcare is a deeply personal matter. Subjecting people to substandard government healthcare is the wrong prescription here in North Carolina. Yes, we need more affordability and access, but reforms aimed at achieving these goals should put people — not politicians or insurance companies — in control of their care. North Carolina lawmakers should reject Medicaid expansion in favor of a personalized approach to healthcare.