New Study Supports NC Medicaid Expansion

By Rose Hoban

Not only patients, but hospitals, health care providers and even restaurants, construction companies and retail outlets would benefit if North Carolina expands the Medicaid program, according to a new study from two of the state’s largest health care foundations.

In all, 43,000 extra jobs would be created if the General Assembly would increase access to the program that provides health care coverage for healthy adults, as allowed for under President Obama’s signature Affordable Care Act. Currently, North Carolina covers about 1.8 million low-income children, their parents, people with disabilities and poor elderly who mostly live in nursing homes. Expansion would extend health coverage to parents who make more than 50 percent of the federal poverty level ($9,895 for a family of three), as well as childless adults without disabilities.

Authors of the study, which was paid for by the Winston-Salem based Kate B. Reynolds Foundation and the Greensboro-based Cone Health Foundation, calculated that North Carolina is foregoing about $22 billion in business activity by not expanding the program. (The Cone Health Foundation is a supporter of N.C. Health News).

diagram of who falls in the Medicaid coverage gap — In states without Medicaid expansion, millions of adults do not qualify for the program, while still not making enough to qualify for subsidies. Diagram courtesy Kaiser Family Foundation.

“We just focused on the facts, and the facts and the numbers speak for themselves,” said Cone Health Foundation president Susan Shumaker, She acknowledged that the issue is deeply political and the two groups worked to find non-partisan researchers to do the economic analysis, using publicly available data. The foundations had health policy researchers from George Washington University write the report.

Shumaker said prior studies conducted by the North Carolina Institute of Medicine and the Urban Institute in 2012 found similar results, but she said as time has passed the economic benefit has become more pronounced.

“I think these findings were probably even more compelling than the previous studies,” Shumaker said.

In the past month, three more Republican-lead states – Utah, Wyoming and Tennessee – have announced plans to embrace Medicaid expansion, and last week the new governor of Alaska, an independent who campaigned on expansion, said he was eager to move forward.

In an opinion column for the Wall Street Journal published Thursday morning, Kaiser Family Foundation head Drew Altman wrote, “In the struggle between pragmatism and ideology over Medicaid expansion in red states, pragmatism may slowly be winning.”

But even though Gov. Pat McCrory and Health and Human Services Sec. Aldona Wos have shown interest in finding a way to expand the program, legislative leaders in Raleigh have expressed little interest in reversing the course they took early in the 2013 session to reject expansion and forego creating a state-based health insurance exchange.

“It would be impossible for us to expand Medicaid at this point,” said Sen. Ralph Hise (R-Spruce Pine), who co-chairs the Joint Legislative Oversight Committee on Health and Human Services. “It’s feasibly impossible for us to implement it.”

Despite asserting that Medicaid was “broken” throughout 2013, Wos said her department has made progress on reorganizing the administration of the program, stabilizing the budget and forecasting, and finished the fiscal year with a surplus. She said her department is working on finding a way to expand.

“We’ve made enormous progress, organizationally, structurally,” Wos told reporters last week after the final meeting of a legislative subcommittee on Medicaid reorganization. “We have greater efficiency, greater accountability and greater ability to manage the precious resources we’re allotted.”

Among other findings, the report calculated:

⁃   Medicaid expansion would enable more than 300,000 low-income adults to gain coverage in 2016, scaling up to 500,000 in 2017.
⁃   The state would lose an estimated $21 billion in federal funding between 2016 and 2020, at a state cost of about $1.7 billion.
⁃   Expansion would create 43,000 jobs by 2020, about half in health care. The rest would be in construction, retail and wholesale, scientific and technical professions and the food and beverage industry.
⁃   Expansion would result in $860 million in state tax revenue and another $161 million in county taxes.