As legislators discuss what to do about the state’s Medicaid program, some numbers to put it in perspective. The first of a series looking at North Carolina’s Medicaid program.

By Rose Hoban

By now, the rhetoric is familiar: North Carolina’s Medicaid program has been characterized as “broken,” “out of control,” “a monster” and responsible for cuts to everything from education to road repair.

So as lawmakers tussle over the future of Medicaid, let’s take a look at some recent numbers, some recent trends.

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As of July 2015, that’s how many people were on Medicaid. But understanding that number’s not so simple.

Seven years ago, in July 2008, just before the economic meltdown, North Carolina’s Medicaid enrollment stood at 1,282,516. What accounts for the growth since?

A couple of things, according to Steve Owen, an analyst with the legislative Fiscal Research Division. In a presentation Owen gave to lawmakers in January, he explained that key drivers for enrollment are population and unemployment.

For one thing, in 2008 North Carolina’s population was 9.28 million, meaning 13.8 percent of state residents were on Medicaid. By this year, with a population that’s grown to about 10 million, that number has increased to 18.4 percent.

Why the growth?

Medicaid is a “counter-cyclical” program: the more people who are unemployed, the more who end up on the program. And it’s not primarily those who lost jobs; for the most part, it’s their kids.

A family of four can make up to about $50,000 a year (210 percent of the federal poverty level) and be eligible to enroll their children under 5 in Medicaid. For families with children under 18, the income limit drops to about $32,000 a year.

According to the U.S. Census, the average household income in North Carolina stands at about $46,000. That means there are plenty of households whose income is low enough to qualify their kids for Medicaid. In some instances, parents of these children – in particular, pregnant women – are also eligible.

For a single, childless working adult to qualify for Medicaid, their income needs to be less than $5,767 a year.

Though the economy is recovering, in the past year the number of kids on Medicaid has grown considerably. Some of that growth is an accounting sleight of hand, said Pam Silberman, a Medicaid expert at the UNC Gillings School of Global Public Health.

She explained that under the Affordable Care Act, kids were moved from the state children’s health insurance program, called Health Choice, over to Medicaid. So in January 2014, about 65,000 kids were shifted from one program to another, partially accounting for the recent growth of Medicaid.

And the number of kids on Health Choice has continued to drop: Since January 2014, about 9,000 additional kids have been moved off its rolls.

“Almost 60 percent of Medicaid enrollees are children now,” Silberman said.

But she said now there are also more adults on Medicaid.

It’s called the “woodwork effect,” she explained. “When the ACA was implemented, people showed up to find out whether they were eligible for coverage. First they were assessed to see if they were eligible for Medicaid.”

“Some families were determined to be eligible for Medicaid, even though they didn’t know it before,” Silberman said.

So in the past year, about 66,900 adults who had been eligible for years began to receive Medicaid.

That woodwork effect, along with the changes in children’s coverage, has accounted for about 125,000 total new enrollees. That amount can be attributed directly to Obamacare.

What’s it all mean?

No matter how you slice it, Medicaid’s grown. But how much?

In 2008, about 778,296 children were covered by Medicaid or Health Choice. By 2015, that number had increased to 1,004,317, for an annual growth rate of 3.7 percent.

If you look at total beneficiaries, the program grew faster overall. In 2008 a grand total of 1,407,257 North Carolinians were covered by Medicaid or Health Choice. By 2015, that number had increased to 1,911,918, for an annual growth rate of 4.5 percent.

Over the same time period, the state’s population grew at an annual rate of 1.2 percent.

If you subtract away the folks who were added to Medicaid as a result of the woodwork effect, that annual average rate of increase drops to 3.9 percent, a rate of growth that’s still faster than the population is growing.

Matt Salo, head of the National Association of Medicaid Directors, said about a third of all kids in the country are covered by Medicaid, and more than half of all births.

But the numbers above show about 41 percent of North Carolina’s kids are covered under Medicaid or Health Choice, higher than the national average.

Salo said the good news is that kids are cheap to cover.

Number crunchers like Steve Owen agree. He’s told legislators several times over the past year that part of North Carolina’s success at holding down Medicaid costs has been due, in large part, to that increase in the number of children enrolled, because children are less expensive to cover.

And what is costs to cover children versus adults and other beneficiaries is what we’ll look at next time.

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