As Medicaid turns 50, a look at who benefits from the program in North Carolina.

By Rose Hoban
Data visualization by Steve Tell

This Thursday, July 30, marks the 50th anniversary of the Medicaid and Medicare programs. On that date in 1965, President Lyndon Johnson signed amendments to the Social Security Act that established the two programs.

Today Medicaid is paid for by a combination of state and federal dollars: In North Carolina, for every dollar the state puts toward the program the federal government pays two more dollars. Nonetheless, Medicaid is one of the largest parts of the budget of any state, including North Carolina.

A little history

In a memoir about the passage of the bill in 1965, Wilbur Cohen, who was one of the principal architects of Medicare and Medicaid, called Medicaid the “sleeper” part of the law. The provisions creating Medicaid consisted of a mere 22 pages out of the 296-page bill.

Cohen, who was undersecretary of the Department of Health and Human Services, remembered that, “Most people did not pay attention to that part of the bill.”

Pres. Lyndon B. Johnson shakes former Pres. Harry Truman's hand after signing Medicare and Medicaid into law on July 30, 1965. Photo courtesy the LBJ Library Archives.
Pres. Lyndon B. Johnson shakes former Pres. Harry Truman’s hand after signing Medicare and Medicaid into law on July 30, 1965. Photo courtesy the LBJ Library Archives.

At the time, Medicare, the program that covers health care for the elderly, was the much more controversial part of the legislation.

“The full awakening to the scope of the Medicaid legislation did not come until much later,” Cohen wrote.

Nowadays, Medicaid comprises, on average, 16.9 percent of state budgets, according to the Pew Charitable Trusts. In North Carolina, that figure is closer to 14.1 percent.

Senior surprise

One of the big drivers for Medicaid spending is the number of “aged, blind and disabled” who are on the program. Although they are fewer in number, those people are more expensive to care for – in particular, those older people who need nursing home care.

In the most recent data available, dating from fiscal year 2013-14, spending for someone in the “aged, blind or disabled” category of Medicaid was just under $17,000 per year. In that year, enrollment for those beneficiaries comprised 24 percent of Medicaid beneficiaries, but accounted for 63 percent of spending.

[pullquote_right]Like what you read on NC Health News? Help make it possible. Make a donation today. As little as $10/ month will help keep us going![/pullquote_right]To the surprise of many, Medicare, the program for seniors, pays for relatively little nursing home care. The heavy lifting is done, instead, by Medicaid, which picks up the tab for nursing home care only 90 days after a low-income senior ends up in a skilled nursing facility.

“I doubt that many people understood that they’d passed the long-term care financier of last resort for this country,” said Duke University health economist Don Taylor. “People didn’t live as long, and they didn’t realize that one way people would become impoverished was paying for long-term care.”

But in 1965, the life expectancy in the United States was only 70.2 years, and most people were not thinking about the fact that many poor seniors would end up needing years of care, paid for by Medicaid. Now life expectancy in the U.S. is, on average, 78.4 years.

In an interview with N.C. Health News in 2013, former state Medicaid director Carol Steckel said that Medicaid was a program “of its time.”

“Think about the health care system at that time. If we went into the hospital, we either died or went home. We did not have chronic diseases,” she said. “I don’t mean to be crude about it, but that’s what happened. We didn’t have chronic illnesses. You didn’t have hypertension, you didn’t have diabetes like you do now, so the system was designed around the physician visit, the [hospital] inpatient visit.”

As of the beginning of July 2015, North Carolina had 121,143 elderly people and 283,503 disabled people on the program. And some areas have more elderly in the population: In seven North Carolina counties – Warren,Tyrell, Northampton, Hyde, Hertford, Halifax and Bertie – more than 3 percent of the entire county population are seniors who are poor enough to qualify for Medicaid.

On the other hand, children are relatively cheap to cover. In FY 2013, it cost Medicaid about $2,700 to cover a child. In that year, there were 926,703 kids on the program. But in the wake of changes created by the Affordable Care Act, many kids covered by the state children’s health insurance program were moved to Medicaid. Now there are more than a million children in the program.

To use the data map, click on a county. To find out the number of beneficiaries in each category, hover over the pie chart. Data sources: N.C. DHHS and N.C. Office of State Budget and Mangement.

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