Under the Affordable Care Act, more popularly known as Obamacare, a new welfare program was created in an attempt to close insurance coverage gaps across the nation. It expands Medicaid rolls by offering means-tested eligibility to primarily able-bodied childless adults up to the age of 64, with incomes up to 138 percent of the federal poverty level.
Who pays for North Carolina’s Medicaid Expansion?
Medicaid expansion is paid for by taxpayers through a combination of federal and state spending. Before 2020, nearly 100 percent of the cost of newly-eligible enrollees will be picked up by federal taxpayers. Next year, states will kick in 10 percent of the total cost going forward. Given that the federal government is nearly $22 trillion in debt, much of Medicaid expansion will be paid by borrowed funds. Future generations will be paying for expansion through increased taxes coupled with spending cuts. Nearly two-thirds of current federal spending goes towards Social Security, Medicaid, and Medicare. As our nation ages, the competition for health entitlements and social service programs will grow even more intense.
Some states have specifically eschewed expansion because of the belief that the percentage of the share that the state is expected to bear will inevitably rise in the future.
Who is eligible for Medicaid Expansion if it is enacted in North Carolina?
Medicaid eligibility will be expanded to all individuals not currently eligible for Medicaid with incomes up to 138 percent of the federal poverty level. Research has shown that the majority of those newly eligible under expansion will be able-bodied, working age childless adults.
What is the cost of Medicaid Expansion for North Carolina and the federal government?
Medicaid expansion would bring an estimated cost of $6 billion between 2020 and 2030 for North Carolina’s state share alone. For the federal government, total Medicaid expansion costs will reach $100 billion annually by 2021 according to the Congressional Budget Office. By 2025, the amount will be over $130 billion. With a national debt of already nearly $22 trillion and annual deficits reaching $1 trillion, the federal government’s promise to fund 90 percent of expansion costs may be in jeopardy in the near future.
Most every state that opted for expansion has currently and will continue to face skyrocketing costs past initial estimates. Nationally, higher enrollment figures than projected have led to cost overruns of 157 percent.
For instance, Ohio saw enrollment figures a whopping 58 percent higher than initial projections. North Carolina’s current share of Medicaid expenditures is a little over $3 billion, or about 16 percent of the General Fund budget. Before expansion, most states already spent a quarter of their entire budget on Medicaid.
How many North Carolinians are expected to join the Medicaid rolls if the program is expanded?
An estimated 630,000 more residents of North Carolina will be placed on Medicaid. Currently, there are 2.1 million North Carolinians on Medicaid, which will lead to further overcrowding at a time when more physicians are eliminating or limiting the amount of Medicaid patients they currently see.
Can states opt out of Medicaid Expansion?
Yes. The Supreme Court ruled in 2012 in National Federation of Independent Business (NFIB) v. Sebelius that states can’t be compelled to expand their Medicaid rolls. North Carolina has previously rejected expansion under Gov. Pat McCrory and the General Assembly in 2013. To date, 36 states and D.C. have expanded Medicaid while 14 states have opted out.
Is there a pot of money that goes to another state if North Carolina does not join Medicaid expansion?
No. This is a frequent argument from Democrats and Republicans who want to expand Medicaid. The money is simply not spent and added to our federal budget, deficit, and debt. There is no pot of money set aside waiting to be spent. In fact, the Congressional Budget Office notes that federal spending goes down when a state opts out of the expansion.
If Medicaid is expanded why do many say it will hurt the poor or needy?
Expansion efforts are almost always cited as a necessity to help the poor. A plethora of government watchdog groups and experts, however, note that expansion pulls resources from existing Medicaid patients. The newly eligible would almost all be healthy, working age childless adults, compared to the traditional Medicaid population composed largely of low-income children, mothers, pregnant women and disabled people.
Amazingly, nationwide there already are an estimated 650,000 “truly needy” people on Medicaid waiting lists. Medicaid expansion just makes this problem worse.
A Foundation for Government Accountability report has noted that almost 22,000 people have died while on the waiting list in states that have expanded Medicaid for able-bodied working adults. States are shifting dollars and resources to the expansion programs because the federal government currently covers close to 100 percent of the budgetary costs compared to 65 percent for traditional Medicaid enrollees.
How does Medicaid expansion threaten private insurance?
Because many hospitals rely on billing private insurance at higher rates to subsidize the cost for many government welfare insurance programs that pay out at a much lower rate, many believe that this will put an undue strain on private insurance and its long-term survivability. On average, Medicaid pays out at about 72 cents on the dollar for the cost of services compared to private insurance.