In this Fayetteville Observer article, our own Max Borders asks some difficult questions about Medicaid expansion.
One subject he introduces into the debate is that of trade-offs. This concept rarely seems to enter the minds of the welfare state advocates:
Now, consider also that “32.9 percent of (U.S.) adults who are below the poverty level smoke,” according to TobaccoFreeKids.org. This estimate may well be higher in North Carolina — a state that has cheaper cigarettes than many other states. And let’s not forget that Kids’ Care is meant to help cover families up to 300 percent of the poverty level ($61,000 for a family of four). OK, so that’s 33 percent of our lowest-income families who could afford insurance for a child if just one parent gave up smoking. Are there other things lower-income folks might trade off for a child’s health care? Fast food? Lottery tickets? Custom rims? Beer? Xbox games?
A major unintended consequence of expanding Medicaid is the disincentive it provides for people to climb the career ladder. In certain cases, the end result of you earning more money at your job is less money in your pocket:
Health care expert Michael Cannon of the Cato Institute illustrates this wage-trap starkly: “Suppose a single mother of two small children in New Mexico has an opportunity to increase her annual earnings from $25,000 to $29,000. According to the federal government, the additional taxes and the gradual loss of government aid would cause her income to go up by only $200. If she increased her earnings to $31,000, her income would actually go down by $2,700.” Proposals such as N.C. Kids’ Care actually create greater disincentives to work.