One of the biggest fights in North Carolina politics in 2019 is likely to be over Medicaid expansion.
Since the Affordable Care Act passed in 2010, just over two-thirds of U.S. states have taken the federal government up on the offer to expand Medicaid beyond disabled people and needy children and families, to include able-bodied single adults.
North Carolina is not one of those states — but a growing number of politicians on both sides of the aisle want it to become one.
North Carolina Democrats have said this is their top priority in the current long session of the General Assembly. They’ve amassed gobs of statistics to back up their case — including Gov. Roy Cooper’s insistence that Medicaid expansion would create 30,000 to 40,000 new jobs.
Here’s the short version of the argument against Medicaid expansion in North Carolina.
Ballooning healthcare costs would put North Carolina education and business climate at risk.
Medicaid already takes up a huge chunk of North Carolina’s budget, at about $4 billion and growing. That’s roughly 16% of the state budget, making it our second largest cost after education. It’s also a variable cost that’s hard to predict from year to year.
Rising health care costs are a big problem for the country — and this makes that true for North Carolina as well.
But when the federal government gets hit with higher than expected Medicaid costs, they just print more money and add to the debt. North Carolina is required to have a balanced budget, so any higher costs means either higher taxes or spending cuts elsewhere.
If North Carolina expanded Medicaid, the state projected to need to spend roughly another $500 million each year over the next decade. We must assume that’s the floor.
Throw school construction out the window. That won’t happen if these costs are added on. And forget our status as the “best state for business” as taxes spike to cover the costs.
States that have expanded Medicaid are already finding that the costs are a lot higher than expected.
Ohio expected to pay $13 billion over seven years. Five years in, they’ve already spent $19 billion.
Further, right now, the federal government is promising to pay 90% of the cost of expansion each year, while states pay 10%. But it’s basically a “trust us, we won’t stick you with more of the cost.”
That could change at any moment, and even Ohio Gov. John Kasich is on record in a New York Times op-ed saying that no state should expect the cost-sharing split to stay at that ratio. Any move to reduce the ballooning federal deficit would need to reduce Medicaid costs and shift them to states.
The projected job numbers are made up.
The 30,000 to 40,000 jobs that Cooper says Medicaid expansion could provide is complete conjecture. It’s like a lot of the economic impact reports of major sporting events that take into account secondary and tertiary spending. Certainly, expansion would create some jobs at hospitals, but that also leads to further increasing health care costs.
A real healthcare solution for low-income people focuses on reducing costs.
A real solution would use transparent pricing and eliminating Certificate of Need laws to force health care providers to actually compete and allow people to price-shop. This would drive down costs while maintaining or improving quality.
Cover image of UNC Hospitals via UNC.