Point of View

Medicaid expansion a no-brainer

January 19, 2013 

In the next few months, Gov. Pat McCrory and the General Assembly will decide whether to expand Medicaid to cover about 500,000 low-income North Carolina residents who are uninsured.

The U.S. Supreme Court’s decision in National Federation of Independent Business v. Sebelius in 2012 upheld the Affordable Care Act but held that the Medicaid expansion provisions in the ACA, which take effect Jan. 1, 2014, are a state option. The choice is clear: Medicaid expansion is a great deal for North Carolina and will benefit not just the poor, but every state resident and business.

Permitting the Medicaid expansion to go forward will:

• Stimulate North Carolina’s economy. Like a hundred new businesses, Medicaid expansion will pump billions of new dollars into North Carolina’s economy. The federal government will pick up 100 percent of the cost of expansion for the first three years (2014-2016) and will cover at least 90 percent of the cost thereafter. This means $20 billion in new federal dollars throughout North Carolina over 10 years. The result will be thousands of new jobs and billions in revenue for N.C. businesses.

• Leverage Our Federal Tax Dollars. If N.C. does not expand Medicaid, federal income taxes paid by North Carolinians will fund expansion in most other states. Instead, we will continue to pay for the health care of the 500,000 uninsured poor with state and county dollars. The state Medicaid agency estimates $250 million over 10 years in state budget savings by expanding Medicaid. When combined with new state revenues projected from the economic boost, Medicaid expansion will produce a net savings for the state’s budget.

• Stop large increases in health insurance premiums. Currently Medicaid does not cover many North Carolinians living in poverty. Most poor adults ages 21 to 65 cannot get Medicaid. Every year N.C. doctors and hospitals provide $3 billion in uncompensated care to the uninsured. These costs are passed on to those with health coverage, increasing the annual premium for an insured family by more than $1,000. By expanding Medicaid, we can dramatically reduce this cost-shifting. Otherwise, our insurance premiums will be higher than in states that opt for expansion, suppressing wages and putting N.C. businesses at a competitive disadvantage.

• Help employers avoid large penalties. Beginning in 2014, large employers must offer health coverage or pay tax penalties if employees receive federal tax credits to purchase insurance through the new federal exchange. However, if North Carolina expands Medicaid, families earning less than 138 percent of the federal poverty line will be eligible for Medicaid. There is no penalty to an employer whose employee receives Medicaid.

• Keep rural hospitals open. Because the ACA expands coverage, the law phases out special funding to hospitals providing indigent care. If North Carolina does not expand Medicaid, hospitals will lose not only the expansion dollars but also payments they currently get. Smaller N.C. hospitals that are struggling can thrive under the ACA with an influx of newly insured patients. However, if Medicaid is not expanded, some rural hospitals may close, reducing health care access in rural communities.

• Create a healthier, more productive workforce. Many of those without health coverage are adults with low-wage jobs. Medicaid coverage will provide check-ups and access to prescription drugs, preventing or managing chronic illness. A workforce with health insurance is healthier and more productive. If we don’t implement the expansion, these uninsured citizens will not qualify for federal tax subsidies to buy private health insurance because the ACA limits those subsidies to families that are not in poverty. Again, businesses in other states will have a competitive advantage.

• Reduce health disparities. Like most states, North Carolina has persistent racial disparities in access to health care and health outcomes. Lack of insurance contributes to poorer health outcomes in communities of color, as measured by mortality rates, infant mortality rates and prevalence of certain preventable diseases such as heart disease, diabetes, stroke and HIV/AIDS. Medicaid expansion holds tremendous potential to reduce long-standing racial health care disparities by extending coverage to traditionally underserved communities throughout North Carolina.

• Save lives. A recent study published by the New England Journal of Medicine finds that a Medicaid expansion of 500,000 enrollees will result in 2,840 fewer preventable deaths per year. We can literally save our neighbors’ lives if we expand Medicaid.

With so much at stake for North Carolina, Medicaid expansion should not be a partisan issue. To protect North Carolinians’ health, economy and pocketbooks, all of us need to make our voices heard now so our governor and legislators do the smart thing for North Carolina.

Douglas Sea and Madison Hardee are attorneys with Legal Services of Southern Piedmont in Charlotte.

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