As Gov. Roy Cooper duels with Republican legislators over the state budget and health care, a new study released Wednesday by the George Washington University projects that Medicaid expansion could bring increased economic activity to every county in North Carolina.
The report projects that expansion could bring 37,200 more jobs to North Carolina by 2022. Nearly half of those gains, 17,900 jobs, would come to the large counties of Buncombe, Durham, Forsyth, Guilford, Mecklenburg and Wake.
The study is a collaboration between the university and two North Carolina-based foundations — the Cone Health Foundation, based in Greensboro, and the Kate B. Reynolds Charitable Trust, which works to improve health care for Forsyth County residents.
The report estimates 634,000 more people would gain Medicaid coverage in North Carolina by 2022.
The Democratic governor has suggested he may refuse to sign off on a budget until Medicaid is expanded in North Carolina. The deadline to pass a budget before the start of the new fiscal year is Sunday.
What is Medicaid?
Medicaid is a federal health insurance program administered by the N.C. Department of Health and Human Services for people who could not afford insurance on their own. As it stands now, the federal government covers about two-thirds of the $14.8 billion program covering 2.1 million people in North Carolina.
Who would Medicaid expansion help?
The Affordable Care Act gives states the option to expand Medicaid eligibility to people who are at or below 138% of the federal poverty level, which in 2015 was about $2,743 a month for a family of four.
Expansion would address a group of people who make too much money to qualify for Medicaid right now, but not enough to qualify for a federal subsidy to purchase health insurance in a separate program. This group falls in what is known as the “coverage gap.”
Gregory Adams, a pediatrician from Boone who sometimes works with children whose parents cannot afford insurance, said not having insurance can cause adults to depend on the emergency room for care, which can be an expensive and inappropriate use of resources. By giving these people access to health care, the state would be making a wise investment, he said.
“There is a significant population in our state that really lack good care,” Adams said. “...I just see this as a down-payment that will produce a lot of dividends in the future.”
Why are some legislators opposed to Medicaid expansion?
Republican legislators opposed to Medicaid expansion argue that expanding Medicaid is a temporary, and potentially disastrous, solution to the health-care coverage problem in the country.
“Meaningful reform should increase access to quality, affordable health care,” Republican state Sen. Phil Berger said in an opinion article published last Friday in The News and Observer. “...In fact, the more likely thing is that Medicaid expansion will increase wait times at doctor offices, introduce delays in testing and procedures, and further increase health care costs as additional dollars chase scarce resources.”
How could Medicaid expansion affect NC’s economy?
The report projects job growth in every North Carolina county, small or large, because of the amount of federal money that the Medicaid expansion would bring to the state, said Leighton Ku, the lead author of the study and professor and director of the Center for Health Policy Research at the George Washington University’s Milken Institute School of Public Health.
“If you expand Medicaid, the result is that you bring in billions of federal dollars that invigorate the economy and create jobs throughout the state,” Ku said.
The federal government plans to pay most of the cost of Medicaid expansion — 90 percent after 2020.
Federal funding for Medicaid is projected to increase North Carolina’s gross state product by $2.9 billion in 2022. More than half of the jobs projected after Medicaid expansion would be in the health-care field.
Hospitals and other health care providers would benefit. Cone Health Foundation, which was part of the study, is affiliated with Cone Health, a network of providers.
‘Not just about health care’
However, 16,600 projected jobs are in different fields, such as construction and retail.
DHHS Secretary Mandy Cohen said Medicaid expansion can help the state’s economy in multiple fields because it gives people who were previously uninsured more security to be successful.
“It’s not just about health care,” Cohen said. “It’s about when you’re healthy, you’re able to get a job to make your family the salary they need to be upwardly mobile.”
Michigan expanded Medicaid with the Healthy Michigan Plan in 2014. In a study by the University of Michigan measuring the plan’s impact, 69 percent of people who had a job said they did better at work once they were insured and 55 percent of people out of work said having insurance better allowed them to look for a job.
“In many instances, it may actually be stifling innovation, the lack of health care for people,” said John Chaffee, president of the NC East Alliance, a nonprofit economic development organization. “They may have a great idea of a business they would like to start, but they are inhibited from doing so because they’re reliant on a company health insurance.”
Ku said the researchers did not take this into account when calculating non-health care jobs that could be generated by expanding Medicaid. Instead, the researchers calculated potential buying power health care providers could have and how their purchases could echo throughout the economy.
However, he said people better able to look for jobs because of Medicaid could be “the icing on the cake.”