THE BLOG
05/20/2014 11:30 am ET | Updated Jul 20, 2014

The Economic Case for Medicaid Expansion

From a quick glance at the number of North Carolinians who signed up for healthcare in the first enrollment period, it's clear that the citizens of our great state not only needed the coverage, but also wanted it. Their resolve to have health care was in spite of the efforts of Governor Pat McCrory and House Speaker Tom Tillis, who did everything in their power to prevent over 357,000 citizens who signed up, amid the flawed launch of HealthCare.gov, from having access to affordable health care.

Fortunately, for low-income individuals and families in the state, North Carolina has a second chance during the upcoming short session of the General Assembly, which begins this week, to improve the lives of 500,000 North Carolinians by accepting the Medicaid expansion provision under the Affordable Care Act. Increasing access to health care coverage among low-income working parents is expected to have a number of positive impacts on the overall health of North Carolina families.

Instead of opposing Obamacare simply because it will define President Barack Obama's legacy, the NC General Assembly has an opportunity to reassess the value of health care coverage to the uninsured, taxpayers, and hospitals in our state. Most importantly, expanding Medicaid for those families with incomes up to 133 percent of the federal poverty level is the economically responsible decision for our state's future.

Rejecting the Medicaid expansion not only negatively impacts the productivity of our state's workforce; it will also cost North Carolina financially. Accepting the federal dollars from the expansion of the program, will help our state budget, spur job growth, and improve the health care of a half million adults. The federal government will pay 100 percent of the expansion for the first three years and 90 percent of the cost thereafter.

Under the existing Medicaid system, as reported by the NC Justice Center, public dollars (state, federal and local) pay 75 percent of the total cost of uncompensated care. This is care provided to individuals who lack health insurance, but seek care from hospitals and emergency rooms without the ability to pay. Even without expanding Medicaid, our state will still be on the hook for those without care and will be forced to pay for indigent care through our tax dollars.

What's more, North Carolina's total Medicaid cost is reported to be approximately $14 billion. Of that, the state's portion is roughly $3 billion, with the federal government covering the remainder. In the absence of the Medicaid expansion, the state's portion is estimated to increase to $4.4 billion by 2019. Using these same figures at a 90 percent match rate by the federal government, the state's cost would drop to $1.4 billion. The cost savings from the expansion can be used to create jobs, invest in education, and identify opportunities to expand economic development in rural areas, improving the quality of life for citizens of our wonderful state - all at no additional cost to taxpayers. This is common sense, morally imperative and fiscally sound.

Doing nothing will cripple hospitals in the state. North Carolina's hospitals are estimated to lose around $600 million annually without the Medicaid expansion according to the analysis of North Carolina Institute of Medicine. UNC Health Care, alone, is set to lose $85 million in forgone annual revenue. That is $85 million that could be used for research and improving health outcomes or cutting edge equipment and technology.

Governor McCrory and Speaker Tillis' refusal to accept federal dollars to pay for the care of the uninsured is not rational, fiscally irresponsible, and lacks moral standing. This is especially difficult to understand given North Carolina's current budget shortfall.

The Moral Monday protests will continue in earnest with various organizations, community leaders, and churches across the state advocating for action on issues -- including making the moral case for Medicaid expansion. Hopefully, Speaker Tillis and Governor McCory will provide the leadership to quickly move the General Assembly to reconsider Medicaid expansion as lawmakers continue to grapple with our state's budget this session.

Implementing Medicaid expansion quickly, effectively, and responsibly will not only improve the lives of hundreds of thousands of struggling North Carolinians through greater access to coordinated health care, but it will save the state and taxpayers billions of dollars. Being fiscally responsible, while crafting policy with a moral underpinning, represents the best of North Carolina's values -- let's hope leadership in Raleigh will exercise their best values during this session.

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