The North Carolina General Assembly convenes tomorrow, which makes it the perfect time for my next social justice issue post: Medicaid Expansion in North Carolina. Medicaid expansion is something I feel strongly about, and I wrote a policy brief on it during graduate school. I pulled much of my information from my paper and presentation from last spring.
I wanted to focus on this issue right now in particular because NC can still choose to expand Medicaid, and I urge people to learn more about the issue. Whether you agree or disagree with me, it is an issue that affects all people in this state, and it’s worth being informed.
Medicaid Expansion in NC
- Affordable Care Act (ACA): The ACA, also known as “Obamacare” is a federal statute that includes mandates, subsidies, and insurance exchanges meant to increase health insurance coverage and affordability.
- Medicaid: Medicaid is a government insurance program primarily for disabled individuals and low-income families. Expanding Medicaid in NC would benefit 500,000 individuals with incomes up to 138% of the federal poverty level. Based on the 2014 Federal Poverty Guidelines the income limit for a single person is $16,104.60. The limit for a family of four is $32,913.00.
Why didn’t NC expand Medicaid?
Originally the ACA required states to expand Medicaid, but the US Supreme Court ruled the enforcement unconstitutional; therefore, the decision to expand Medicaid was left up to the states. On March 6th, 2013, Governor Pat McCrory signed Senate Bill 4 into law. SB 4, which was created and approved by Republican legislators exclusively, clarified the General Assembly’s intent to limit NC’s participation in the ACA by declining to expand Medicaid eligibility.
Governor McCrory and other Republican legislators repeatedly defended their decisions by claiming that NC’s Medicaid system is “broken” and eligibility should not be expanded until it is reformed. These claims were made despite the fact that the federal government will pay 100% of the Medicaid expansion costs for the first 3 years and 90% of the costs thereafter.
While there is certainly room for improvement in NC’s Medicaid system, it is misleading to say that the system is “broken.” According to the Kaiser Family Foundation, NC had the lowest growth in Medicaid spending in the nation since 2007 (1). Furthermore, a recent report from the NC General Assembly’s fiscal staff pointed out that NC’s spending on Medicaid claims declined overall by 11.6% since 2008 (2). During the same time period national Medicaid spending per person increased by 6% (3). The system is not perfect, but is it really so “broken” that it is necessary to turn down federal funding that would benefit approximately 500,000 North Carolinians?
Economic Benefits of Expansion
According to an NC Institute of Medicine Medicaid Brief, NC would save $65.4 million over the first 8 years of the expansion (4). The savings are primarily related to reductions in uncompensated care currently provided by hospitals. (Basically, we are already paying for this care in NC via emergency room visits and acute hospital stays. The advantage of Medicaid expansion is that the money comes from the federal government, and people have access to preventative care versus being forced to wait until emergency health care is needed.)
The American Academy of Actuaries posits that premiums for private insurance will be at least 2% lower in states that expand Medicaid, due to cost shifting and healthier people buying subsidized insurance (5).
In addition to lower costs and increased access to healthcare, Medicaid expansion would bring more than $15 billion in federal funds into the state, boosting spending and employment (6). It is estimated that the expansion could result in 25,000 new jobs by 2016 (7).
However, according to the NC Justice Center, NC forfeits $4.9 million per day that could be used to provide insurance coverage for 500,000 North Carolinians. According to their counter at the time of this post, since January 1st, 2014 NC has lost out on more than $1.9 billion of federal funding.
In summary, Medicaid expansion will save the state and its taxpayers money, provide insurance coverage for the state’s most vulnerable citizens, and create thousands of new jobs.
The Human Factor
In 2010 approximately 1.6 million, or 1 in 5, non-elderly people were uninsured in NC (8). Almost half of the uninsured (42.7%) make less than 138% of the federal poverty level and therefore would benefit from Medicaid expansion (9). Experts estimate that about 500,000 individuals would be newly eligible for Medicaid under the expansion (10).
The risk of being uninsured is disproportionate by race. Latinos, American Indians, and African-Americans report much higher uninsured rates than whites, resulting in worse health outcomes for people of color (11). Medicaid expansion would help to reduce this gap and ensure access to health services for all people.
Uninsured individuals face greater barriers to accessing care. Uninsured people are less likely to have a regular source of medical care, less likely to see a physician when acutely ill, and more likely to delay necessary care due to concerns about cost (12). With health insurance through the Medicaid expansion, formerly uninsured individuals are more likely to seek and obtain necessary medical care. One study predicts that Medicaid expansion could save up to 2,840 lives a year (13).
Every year that NC delays implementing Medicaid expansion, the state surrenders billions of dollar in federal funds and leaves 500,000 of the its most vulnerable citizens uninsured. It is up to North Carolinians to make their voices heard and pressure Governor McCrory and the General Assembly to reconsider Medicaid expansion.
1 Kaiser Family Foundation [KFF] (2013). Average annual growth in Medicaid spending. State Health Facts. Retrieved from http://kff.org/medicaid/state-indicator/growth-in-medicaid-spending/
2 KFF (2013). Medicaid payments per enrollee. State Health Facts. Retrieved from http://kff.org/medicaid/state-indicator/medicaid-payments-per-enrollee/#table
3 KFF(2013). Medicaid payments per enrollee. State Health Facts. Retrieved from http://kff.org/medicaid/state-indicator/medicaid-payments-per-enrollee/#table
4 North Carolina Institute of Medicine (2013). Medicaid expansion option issue brief. Examining the impact of the Patient Protection and Affordable Care Act in North Carolina. Retrieved from http://www.nciom.org/wp-content/uploads/2013/01/Medicaid-summary-FINAL.pdf
5 American Academy of Actuaries (2012). Implications of Medicaid expansion decisions on private coverage. Decision Brief. Retrieved from http://www.actuary.org/files/Medicaid_Considerations_09_05_2012.pdf
6 Western Carolina Medical Society (2013). Expansion of Medicaid resolution for WCMS. Retrieved from http://www.mywcms.org/News-and-Events/Newsroom/9-11-Expansion-of-Medicaid-resolution-for-WCMS/
7 Western Carolina Medical Society (2013)
8 KFF (2013). Key facts about health insurance on the eve of coverage expansions. The Uninsured: A Primer. Retrieved from http://kff.org/report-section/the-uninsured-a-primer-2013-tables-and-data-notes/; North Carolina Institute of Medicine [NCIOM]. (2011). Data snapshot. Characteristics of Uninsured North Carolinians 2010-2011. Retrieved from http://www.nciom.org/wp-content/uploads/2010/08/Uninsured-Snapshot_1-28-13.pdf
9 NCIOM (2011)
10 NCIOM (2011)
11 KFF (2013). Key facts about health insurance on the eve of coverage expansions. The Uninsured: A Primer. Retrieved from http://kff.org/report-section/the-uninsured-a-primer-2013-tables-and-data-notes/; NCIOM (2011); Washington, D. L. (2001). Charting the path from lack of insurance to poor health outcomes. Western Journal of Medicine, 175(1), 23.
12 Washington (2001)
13 Sommers, B. D., Baicker, K., & Epstein, A. M. (2012). Mortality and access to care among adults after state Medicaid expansions. The New England Journal of Medicine, 367, 1025-1034. doi: 10.1056/NEJMsa1202099