NC Senate majority leader talks about budget negotiations
“Expand Medicaid!” “Don’t expand Medicaid!” Welcome to one of the most significant debates in the current session of North Carolina’s General Assembly.
Gov. Roy Cooper and legislative Democrats have made expanding Medicaid their number one goal for the 2019 legislative session. Republican legislators remain wary about both the policy and fiscal merits of Medicaid expansion in North Carolina. The governor’s director of legislative affairs has even been quoted in the media saying, “The session ends when we get Medicaid expansion.” There’s also an ongoing guessing game as to whether Cooper will veto any budget passed by the legislature if it doesn’t include Medicaid expansion.
The argument for Medicaid expansion goes something like this — there are people in the state that do not currently have health insurance coverage; Medicaid expansion provides insurance for every adult in the state whose income is less than 133 percent of the federal poverty level; 90 percent of the cost of the program is paid by the federal government, and expanding Medicaid will solve all sorts of current problems such as rural hospital closings and the opioid crisis.
Hearing those arguments you may wonder why North Carolina isn’t already on board the Medicaid expansion bandwagon. Well, like many things that sound too good to be true, there is another side to the story. A full accounting of the facts leads to the inescapable conclusion that expanding Medicaid would be a mistake that not only will fail to solve the problems its proponents claim it solves, but will create new problems and rekindle problems that have just recently been put to rest – such as Medicaid cost overruns and yearly budget deficits.
Let’s take a closer look at how the arguments for Medicaid expansion hold up. First, the claim that Medicaid will provide insurance coverage for approximately 500,000 people that don’t currently have coverage. The truth is, approximately 300,000 of those 500,000 — 60 percent — are either eligible for government-subsidized health coverage through the federal exchange or are already receiving health insurance through their employer. The actual “coverage gap” only exists for less than half of the expansion population. And who is in that gap? Children? No; children in low-income families are already eligible for Medicaid. Low-income pregnant women? No; they are also currently eligible. How about severely disabled individuals? No; already eligible. The truth is that the vast majority of those who would become eligible for coverage under Medicaid expansion are able-bodied adults between the ages of 18 and 50.
Ok; but it’s “free” money; why not take it? You’ve been told that the money is “free” because the federal government currently pays 90 percent of the cost of Medicaid expansion, and the state will only be on the hook for 10 percent — approximately $173 million per year. And that cost will be paid by taxing the state’s hospitals and insurance companies. But what will the state do when the federal government changes the rules and pays less than 90 percent? In fact, the same thing just happened with the children’s health program. The federal government changed its match rate, blowing a $140 million hole in our budget and forcing the state to come up with the additional funds to continue the program.
In other states, expansion enrollment has far exceeded projections, increasing the financial pressure on other important budget items. Likely the first victims of expansion crowding out funding will be the 12,000 disabled North Carolinians with severe developmental needs currently on the waitlist for the state’s optional Intellectual/Development Disability (IDD) Medicaid program. Medicaid expansion would force these folks to continue waiting at the back of the line as able-bodied adults receive care.
Making insurance available to more citizens is a lofty ideal, and I commend my colleagues for their pursuit of that goal. But meaningful health policy reform cannot properly be measured solely by coverage. Meaningful reform should increase access to quality, affordable health care. Expansion of Medicaid will do nothing to train additional doctors, nurses, therapists, or other health care professionals. It will not make more hospital rooms, surgical suites, or diagnostic venues available. 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.
Sen. Phil Berger (R-Rockingham) is the leader of the state Senate.