by Jordan Roberts
Director of Government Affairs, John Locke Foundation
Today a group of North Carolina House Republicans unveiled the NC Health Care for Working Families bill. By all indications, it is a Medicaid expansion bill which closely mirrors plans that have been introduced by Gov. Roy Cooper and legislative Democrats this session. Different from traditional Medicaid expansion is the fact that this bill has a monthly premium and a work requirement.
The bill directs the Department of Health and Human Services to seek a federal medical assistance percentage of 90%, and the state would be responsible for the remaining 10% of the costs. The governor’s budget estimated that expanding the Medicaid program would cost roughly $600 million over the first two years.
To fund that state share of spending, the bill sponsors have proposed paying for the program with enrollee premiums, intergovernmental transfers, and like Cooper’s proposal, taxes on hospitals. My colleague Joe Coletti and I have argued in the past why provider taxes are a terrible idea. Provider taxes are schemes that states use to draw down more federal funding than they would otherwise have, in effect passing the costs of Medicaid off to the federal government.
So, while the sponsors of the bill may be able to say this introduces no new expenses to the General Fund, the costs have to be made up somewhere. As I have argued before concerning Cooper’s projected costs in his budget, there is no free money. The bill introduced today includes additional forms of state funding compared to the governor’s budget; the same idea applies.
This bill is introduced as a report from the state auditor was recently released which found that the state improperly paid more than $100 million to providers in 2018. The addition of over 500,000 individuals to the state’s Medicaid program, which already provides coverage for over 2 million people and is soon going to be transformed into managed care, could be a costly transition for the state.
Many regions of North Carolina suffer from a lack of physicians. Increasing the number of people covered by government insurance won’t improve the access problems for many in North Carolina. According to data compiled by the Kaiser Family Foundation, North Carolina would need to add more than 300 practitioners to meet the full need of those who live in areas without enough primary care physicians. Other legislative reforms to be debated at the General Assembly could help address these needs.
Members of the General Assembly should reject any proposal that would grow the size of government health programs and increase taxpayer spending on public health insurance. Instead, they should look to reforms that would increase the options to receive care from direct primary care providers, telemedicine, or new provider practices.