Ignore calls to expand Medicaid in NC

by Becki Gray, John Locke Foundation and NC SPIN panelist, November 11, 2013.

Gov. Pat McCrory made the right call in late October when he refused to call a special session of the General Assembly to expand Medicaid. While the federal government will continue to pressure states to expand the Medicaid population in order to make Obamacare work, the correct response to expanding Medicaid remains no.

North Carolina’s Medicaid costs are the highest in the Southeast and among the highest in the United States. For the past four fiscal years, Medicaid spending has exceeded its budget by 11 percent.

Total Medicaid costs have gone up 90 percent in the last 10 years. Medicaid costs crowd out spending on other public programs, including education, salary increases for teachers and other public employees, and transportation.

The proposed Medicaid expansion would cost North Carolina taxpayers an extra $3.1 billion over a 10-year period. By 2020, the state would incur net costs of nearly $100 million, jumping to $119 million one year later.

Even though the federal government says it will pay 100 percent of the cost of new enrollees for the first three years and 90 percent by the 10th year of expansion, the expansion would not be free. The money would come from federal taxes; North Carolinians would pay for the additional coverage.

Moreover, the federal government does not always abide by its promises. In 1982, the feds promised to cover 40 percent of the program costs for the Individuals with Disabilities Education Act. Today, Washington provides only 17 percent of the funding. In addition, experts predict that states expanding Medicaid under Obamacare will have less flexibility and control over their Medicaid programs.

Without the expansion, North Carolina’s Medicaid population will increase by 174,000 people by 2022 because of normal growth. With the expansion, by 2022 that number would reach 586,000 new enrollees.

Thirty-one percent of physicians refuse to treat new Medicaid patients. With fewer doctors, there will be pressure for options to treat patients and additional costs to deliver health care.

Medicaid’s “one-size-fits-all” health care results in poorer health outcomes. An Oregon study of uninsured people who were enrolled in Medicaid shows utilization of services increased and Medicaid recipients spent 35 percent more than those not on Medicaid. But of 53 performance measures most widely tracked for North Carolina Medicaid patients, 55 percent of them were worse in 2011 than in 2010. This was not a one-year occurrence: Health outcomes among Medicaid patients have been declining for years.

Obamacare and a larger Medicaid program represent just another move toward a national health care system making more Americans dependent on the government for their health insurance. Instead of increasing dependency on government, we should be moving toward a competitive market where people, regardless of their income, are free to make choices that best fit their needs.

Six of 10 people now on Medicaid once paid for private health insurance. Instead of shifting more people into a broken system, North Carolina should reform Medicaid for those who truly need it and create a real marketplace for private health insurance.

Deregulate the exchanges, and allow the development of varying plans and options, rather than offering one-size-fits-all policies. Offer tax credits or sliding-scale subsidies so individuals can purchase and own their plans. Encourage consumer-driven health plans, personal responsibility, and savvy health care consumers.

Our current Medicaid system is a bad deal — for taxpayers, patients, and the state. Pushing more North Carolinians onto Medicaid is not the answer. Reforming the system — containing costs, improving health outcomes, and allowing more North Carolinians to enjoy freedom to make their own health care decisions — is the best alternative.