Why North Carolina Shouldn’t Expand Medicaid

Thirty-nine states couldn’t make it work. North Carolina needs to stop trying to make Medicaid expansion happen. 

North Carolina should be proud that it is one of the states that have stood firm against the pressure to expand Medicaid and ObamaCare. The state’s spine of steel has kept it from some of the horrible outcomes we’ve seen in expansion states. 

But that spine of steel is softening, and North Carolina’s legislature is considering changing course, enticed no doubt by federal pressure and the false notion that expansion can help rural areas. 

North Carolina’s leaders should reconsider and look at the reality of what Medicaid expansion would mean for the state.

Enrollment Overruns

Every state that has expanded Medicaid has seen a huge influx of able-bodied adults crowding their programs. In all these states, total enrollment far exceeded what expansion advocates estimated.  

In Virginia, for example, initial projections for expansion enrollment were 300,000 people. Now expansion enrollment sits at more than 730,000 people, crowding out budget resources for essential services such as roads, law enforcement, and schools. 

Idaho legislators held firm against expansion for years, but eventually the state expanded Medicaid because of a ballot initiative and a low-turnout election. Voters were assured that only 62,000 able-bodied adults would enroll. As of March 2022—just four years after expansion was voted in—there were more than 120,000 able-bodied adults enrolled, nearly double the original estimates, and that number continues to grow. 

To date, enrollment in every expansion state has blown enrollment predictions out of the water. What would make North Carolina any different?

People Kicked Off Existing Insurance

Much of the enrollment overrun can be attributed to able-bodied adults who previously had insurance but were moved onto Medicaid after expansion. In states that haven’t expanded Medicaid, nearly 2.4 million individuals with incomes between 100 and 150 percent of the federal poverty level receive federal premium subsidies from the ObamaCare exchange. Most of these individuals have income that would fall within Medicaid expansion guidelines, meaning if their state expands, under federal law they will automatically lose access to their private insurance subsidies. 

If North Carolina expands Medicaid, as many as 160,000 people could be shifted from their existing insurance and flood Medicaid.

Waitlists and Resources Diverted from the Truly Needy

Medicaid was designed to provide health care coverage for the truly needy—people with disabilities, the elderly, low-income children. 

Even without expansion, roughly 15,000 truly needy North Carolinians are on a waiting list for Medicaid services. Expansion would flood the Medicaid program with able-bodied adults, many of whom already have private insurance, and every dollar a state spends on them is a dollar that isn’t available to those who truly need it. The truly needy get pushed further and further back in line.

Busted Budgets and Lots of Fraud

Nationwide, more than one in five dollars spent on Medicaid is squandered on clerical errors, payments to ineligible people, and downright fraud. 

North Carolina already spends about 30 percent of its budget on Medicaid. Initial cost projections for expansion in the state were $50 billion over 10 years, but based on what happened in other states, locals should expect nearly double the cost. More than half of able-bodied Medicaid expansion enrollees do not work. The financial impact of expanding now could be catastrophic.

Bigger Problems for Rural Hospitals

The hospital situation in expansion states is so bad that legislators have gone as far as to call it an “unmitigated disaster.”

Expansion advocates promised thousands of hospital jobs if states expanded, saying it would save rural hospitals. Instead, roughly two out of every five expansion state saw hospital job losses after expanding and nearly 50 hospitals have closed. Between 2013 and 2016, Medicaid shortfalls at hospitals in expansion states grew by nearly $5 billion. 

Many expansion advocates in North Carolina are trying to tie expansion with the Healthcare Access and Stabilization Program, or HASP. HASP is a reimbursement program to help hospitals facing financial losses. Passing HASP is not conditioned on Medicaid expansion—in fact, Medicaid expansion will just make care even more unaffordable with lower reimbursement rates. 

Expanding Medicaid won’t save North Carolina hospitals. 

Bottom Line: Medicaid expansion is a no good, rotten deal for North Carolina. Avoid at all costs!

It’s often said that states are the laboratories of democracy. Well, that means there have been 39 failed experiments at trying to make Medicaid expansion work. The program costs billions of dollars, pushes people off their existing insurance, strains hospitals into closing down, and leaves states struggling to remain solvent. North Carolina should stand strong and not expand Medicaid!