Bitter division over Medicaid expansion prevented Democratic Gov. Roy Cooper and Republican state legislators from agreeing on a budget. Now expansion is a top issue in the governor’s race.
Cooper says expansion will cost the state nothing. He cites a study predicting it will cover 634,000 people and create 37,000 jobs.
His Republican challenger, Lt. Gov. Dan Forest, says expansion will bankrupt the state, discourage work, and promote dependency on the government.
Who’s right?
We decided to look at the experience of some of the 36 states plus the District of Columbia who’ve already expanded the program, to see how it's working there. But first, it’s important to understand what Medicaid expansion does.
Right now, North Carolina’s Medicaid program covers children, the disabled and elderly who are poor. It also covers parents earning less than 42% of the federal poverty level — or $5,208 a year for one adult. The federal government picks up two-thirds of the tab for this “traditional Medicaid.”
Expansion — which was made possible by the Affordable Care Act — would cover everyone earning less than 138% of the poverty level. That’s $17,609 for a one-person household. The federal government pays 90% of the cost. States have to figure out a way to pay the remaining 10%.
Many states require participants to contribute; some dip into their general fund. Some get hospitals to pick up the tab. Many hospitals agree to foot the bill because expansion is generally good for their bottom line.
Governor Cooper wants North Carolina hospitals to pay the difference, but the North Carolina Healthcare Association hasn’t agreed to do so. It says the General Fund should pick up the tab. Both Cooper's office and the Association say they are in “conversations” about paying for expansion, and Cooper says he’s willing to negotiate with the legislature.
But that’s how Virginia is paying for its Medicaid expansion program. Anna James is the senior vice president of Sentara Health Care, the largest health care system in the state.
James says expansion saved Virginia $152 million last year because the state is spending less on other safety net programs, like mental health services, which Medicaid covers. Expansion means the federal government now pays 90% of the cost for care for Virginia state inmates, she says, and it's paying for the indigent care provided by the state’s teaching hospitals.
And James says health benefits are already significant even though expansion is less than two years old. James says almost half a million people have coverage through expansion, many of whom hadn’t seen a doctor in years. That’s meant a lot of people have now being diagnosed and are treated for diseases they may not have even known they had.
James says “almost 75,000 are now being treated for high blood pressure, almost 40,000 are being treated for diabetes, 18,000 for asthma.”
About 10,000 are now being treated for cancer, but James said many cases were caught too late because of a lack of prior care.
“We saw some in stage 4 of these recipients and some of which could have been prevented or if detected early they would have had better outcomes,” she says.
Expansion in Virginia has mostly benefited the working poor since many jobs don’t provide access to care. Those who work in agriculture, tourism, construction, and restaurants frequently don’t have access to coverage, she says.
Contrary to concerns that expansion would overwhelm the system, James says, expansion made it easier to recruit doctors — including some from North Carolina — because those who work with the poor now have an assurance their practices will be paid.
Sherry Glied, a health economist and the Dean of NYU’s School of Public Service, says studies show across the country that expansion has resulted in benefits like greater productivity, greater cancer survival rates, and lower mortality rates, especially among 55- to 64-year-olds.
“In that group, the reductions in mortality are on the order of almost 10%, which is huge,” she says.
Many early concerns about expansion have not been borne out, she says. In general, it has not increased state budgets, and there is “no evidence whatsoever” that it overwhelms medical systems.
By not expanding, Glied points out, North Carolinians are losing money because their federal taxes fund expansion in other states, instead of coming back to the state’s hospitals and health care workers. The federal subsidy, which a 2019 study estimated will be $4.7 billion by 2022, would create new health care jobs and stimulate the economy, Glied says.
“People go out and spend that money,” she says, “so when that doctor is paid … or the hospital orderly is paid and that hospital orderly takes her family out to dinner at a restaurant and there’s a waiter at that restaurant, that waiter is now being paid … and so the economic benefits actually multiply as you go through the economic chain.”
But — especially at the beginning of the program — some states have found expansion cost more than projected. Those estimates are getting better, but Forest’s office says he worries North Carolina could end up being more like Indiana or Ohio. The Indiana governor’s office says the program has no impact on the state budget; it just renewed its Medicaid expansion program for 10 years. But Ohio’s savings offset only 24% of the cost of expansion; its budget experts have estimated it will pay for 3% of the program cost next year.
Forest says expansion would “bankrupt” the state and is a “one-size fits all government program.” He supports several Trump Administration measures, including requiring hospitals to post prices so those with resources know how much they have to pay. He also wants to “incentivize” doctors to move to rural areas.
And he says he’d like to expand private insurance options. His campaign says he supports a North Carolina law which allows small businesses to ban together to buy group health insurance, but last year a court has blocked a similar plan, so its unclear whether those plans will ever be offered.
Jordan Roberts of North Carolina’s conservative John Locke Foundation agrees. He tried to project the cost of expansion and worries that Cooper’s estimated hospital assessment won’t be enough to cover the cost.
“If we were to expand and you know, assume this risk, that may put our historically very strong and prudent budgeting in jeopardy,” he says.
Accurate cost projections could be particularly had during the pandemic, he points out because the number of poor people without coverage has increased.
But Cooper says recent increases in unemployment and loss of coverage make expansion a “moral imperative.”
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