If North Carolina were to expand Medicaid eligibility for those who currently do not qualify for the program under 138% FPL ($16,000 for an individual), the federal government promises to fully fund the cost until 2017. At that point, states will take on some of the financing, maxing out at 10% starting in 2020.
In the short-term, this is a tempting deal for states to take on – especially since President Barack Obama has recently offered non-expansion states an additional three years of full funding. To date, 31 states have already gone forward with expansion. Since it seems like more states are catching the “everyone’s doing it” mentality, why hasn’t North Carolina?
- Starting in 2020, expansion would cost North Carolina $6 billion over the next decade. That comes out to an extra $600 million per year. In the long-term, this will either lead to reduced provider payments, diverting resources from other important parts of the budget such as education or transportation, or tax increases.
- Despite what expansion proponents say, North Carolina is NOT leaving $5 million a day on the table by opting out of expanding. According to the Congressional Research Service (CRS), when Congress drafted Obamacare, a pot of money was not allocated for Medicaid expansion. Rather, the reality is that an influx of federal funding would merely be adding to the federal deficit – taxing future generations and their children.
- Expansion advocates cite numerous studies suggesting that federal funds pouring into the state would help create upwards of 40,000 jobs in the health-care sector. The thinking that Medicaid is now a jobs program strays away from its original purpose – a health insurance program for our most vulnerable citizens. Katherine Baicker, health economist at the Harvard School of Public Health, explains:
“Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government with less money to perform all other governmental functions — including paying teachers, scientists, and social workers. That trade-off can be justified if it goes along with improved health outcomes, but not if those jobs do not generate benefits that exceed those of alternative uses.”