As of December 2018, over 2 million North Carolinians were enrolled in the state’s Medicaid program. That’s approximately 1 out of every 5 people in the state.
Some want the state to expand its Medicaid program to include able-bodied, working-age adults, most of whom have no dependent children. Doing so would increase enrollment by approximately half a million people, an increase of at least 25 percent.
Medicaid expansion is again starting to gain steam as an election issue, but why is Medicaid expansion a bad idea for North Carolina? The most compelling reason: it will crowd out care for those who need it most.
Medicaid already serves the most at-risk populations. Expanding Medicaid would force traditional Medicaid populations to compete for limited access to care with hundreds of thousands of mostly childless, able-bodied adults.
North Carolina context
The key issue of the 2019 legislative session was the battle over the expansion of the state’s Medicaid program under the Affordable Care Act (ACA). Medicaid expansion was one of the key reasons Gov. Roy Cooper vetoed the state budget, and the governor’s legislative representative even went as far as to say “The session ends when we get Medicaid expansion.”
Despite holding the state budget captive, the governor was not able to accomplish his top policy objective of expanding Medicaid. The Medicaid expansion debate is often framed as an issue of healthcare versus state budget considerations. And the battle has gotten ugly: expansion supporters have even accused skeptics of being racist or hating the poor.
Fiscally conscious lawmakers are rightfully concerned about the costs of growing government through expanding the state’s Medicaid program. Most states that have expanded experience cost overruns within the first years of the program. The ever-increasing federal deficit and debt problems make it a good bet the inflated 90 percent federal match for expansion enrollees is almost certain to be on the chopping block in the coming years (Remember, the traditional Medicaid population has a 67 percent federal match).
But when it comes to Medicaid expansion, cost is actually the least of our worries. Larger concerns include increasing government distortion of the healthcare market while doing nothing to actually lower costs and crowding out access to care for those who need it most. The former is a topic you can read about here; the latter, we will now explore.
The bigger picture of Medicaid expansion
Civitas has written many times about the issue of Medicaid expansion crowding out care for the most vulnerable (you can read about it in detail here, here, and here). But the point boils down to one simple statement: insurance coverage does not equal access to health care.
Medicaid is a joint federal and state program that was intended to provide health insurance coverage to society’s vulnerable populations. In North Carolina, Medicaid enrollees must meet both income and categorical requirements to be eligible. Categories include: children, parents, the elderly, pregnant women, or individuals with disabilities. Each category has an income threshold, expressed as a percent of the federal poverty level.
The dual eligibility standard means that just being poor is not enough to make someone eligible for Medicaid. Expansion would change that and provide Medicaid eligibility for anyone under 133 percent of the federal poverty level.
However, the current categorical eligibility means that the most high-need populations are already covered. As a result, those who would be newly eligible under expansion would be able-bodied, working-age adults, 78 percent of whom would have no dependent children.
North Carolina’s Medicaid program is already positioned to achieve its goal of helping those who need it most. However, it still faces challenges of actually translating insurance coverage into healthcare access. Thus, expansion is not a neutral choice; it could actually harm current Medicaid enrollees by further limiting their access to care.
Access to care is already strained for those who need it most
Medicaid reimburses healthcare providers at a lower rate than private insurance. Therefore, doctors and other healthcare providers have an incentive to prioritize private insurance patients. In a 2018 study of US physicians, 32 percent reported that they limit their number of Medicaid patients or do not see Medicaid patients at all. That’s essentially a third of doctors across the country. Remember, about 20 percent of North Carolina’s population is already on Medicaid.
Perhaps the most impactful way to understand the issue of limited access to care is hearing about it from someone who has experienced it firsthand. Colleen Leonard is a mother of four who’s oldest child, Mason, requires around the clock medical care. Colleen’s family has experienced long wait times and losing access to physicians that stopped accepting Medicaid patients. Adding a half million (or more) people to compete for limited access to care would only make the situation worse for families like Colleen’s. Take a moment to watch Colleen’s story:
While some have argued that healthcare supply will simply increase to adjust to the increased demand from Medicaid patients, Civitas Executive Vice President Brian Balfour details why that is likely not the case, given what we’ve seen from states that have already expanded Medicaid. Read that full piece here.
What about the uninsured?
Medicaid expansion is a proposed solution to a legitimate problem – created by the ACA – known as the “coverage gap,” in which some uninsured, childless adults have incomes that are too low to qualify for a subsidy on the federal exchange. It is worth noting that, if these individuals were working full time at minimum wage, they would qualify for a fully-subsidized insurance plan on the federal exchange.
Consider also that an estimated 63 percent of individuals who would be covered by Medicaid expansion currently have private insurance. Moreover, an additional 11 percent of the expansion group are currently eligible for free plans on the federal exchange but remain uninsured. Many of these individuals would lose their private insurance and have Medicaid as their only option if the state expands. As mentioned, Medicaid recipients have a harder time finding medical providers and seeing them in a timely manner.
In addition to harming existing Medicaid patients, expansion takes away private insurance options for many of its beneficiaries. Furthermore, transferring hundreds of thousands of patients from private insurance pay to Medicaid would have a significant negative impact on hospitals’ and other care providers’ bottom lines.
The bottom line: Coverage does not equal access to care
Health insurance should not be equated with access to healthcare. Adding hundreds of thousands of new recipients onto the Medicaid rolls would harm the traditional Medicaid population. Many of the new recipients under expansion will be forced to trade their more-generous private health insurance options in exchange for longer wait times and less available providers. With this context in mind, it quickly becomes clear that Medicaid expansion is a proposed solution that is not appropriate to the problem at hand.
For more information about why Medicaid expansion is a bad idea for North Carolina, including frequently asked questions on the subject, check out the Civitas Medicaid Expansion Resource Page here.