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Solve The Problem. Don’t Fund The Problem.

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Successful implementation of the Affordable Care Act (Obamacare) relies on its two major components — health insurance exchanges and Medicaid expansion. The Affordable Care Act is 2,000 pages of bad policy, and reality shows that this law cannot live up to its name.  It would be wise for North Carolina legislators to continue to reject Medicaid expansion, thereby limiting the ACA’s harmful effects.  

Medicaid is a program jointly funded by the state and federal governments that delivers medical services to low-income parents and children, pregnant women, the elderly, the blind, and the disabled.  The federal government currently funds two-thirds of North Carolina’s $14 billion Medicaid program.   

Under the law, states now have a choice whether to expand Medicaid eligibility to individuals earning up to 138 percent of the Federal Poverty Level.  This figure equates to an individual earning $16,105 a year and a family of four earning $32,913 a year.  According to the NC Department of Health and Human Services, the decision not to expand Medicaid leaves 154,000 North Carolinians without coverage.  A majority of this population represents childless adults, a population that Medicaid has not covered in the past.   

There are many sound reasons why North Carolina state leaders refused to expand Medicaid.

The federal government’s expansion deal sounds enticing, as federal money would cover 100 percent of benefits for this added population until 2017 and 90 percent in years thereafter.  Of course, all is not what it seems.  What this deal really means is that the federal government would be borrowing more money to fully fund an expansion for three years, taxing future generations and applying a stronger chokehold on the federal deficit. Federal bureaucrats still have not learned that throwing more money at the problem does not solve it. 

The central problem here is the poor management of our state’s Medicaid program.  On a national level, Medicaid has been mismanaged for decades.  The amount of taxpayer money being poured into medical assistance does not justify the health outcomes for most beneficiaries. 

For example, North Carolina has measured patient health outcomes with the Healthcare Effectiveness Data and Information Set.  This is a set of metrics used by more than 90 percent of health plans in the United States and has been used for several years. 

Although half of the state’s widely tracked performance measures have improved, half have been declining since 2008.  The percentage of certain Medicaid populations utilizing particular services remains low.  Just 35 percent of women on Medicaid receive breast cancer screening, while only 37 percent of adolescents utilize preventative care services.  Seventeen percent of those with mental illnesses engage in follow-up visits after hospitalization.  

And while the state’s program mostly operates on a primary care case management model, which seeks to capitalize on primary care services to reduce hospital costs, emergency room visits are actually increasing for adults along with the aged, blind, and disabled Medicaid populations.    

Furthermore, total Medicaid spending in North Carolina has almost doubled in the last decade, from less than $8 billion annually to more than $14 billion annually in 2012.  In each of the last four fiscal years, North Carolina’s Medicaid spending exceeded its appropriated budget by an average of 11 percent.

Clearly, costs need to be contained.  Expanding Medicaid eligibility to able-bodied citizens would exacerbate the program’s "open-checkbook policy" and divert more resources from the most vulnerable citizens on the program who truly need medical assistance.

North Carolina can certainly learn from other sates that have expanded eligibility to this population in the past.  Arizona’s expansion back in 2002 originally projected slow enrollment growth, maintainable costs, a reduction in the number of uninsured, and reduced uncompensated care.  All four of these projections were turned upside down.  The expanded population (mostly childless adults) ended up costing two to four times more than low-income parents.  Similar outcomes occurred in Oregon, Delaware, Maine, Washington D.C., Utah, and Vermont.           

Lastly, Medicaid expansion will not pave a smooth road to accessible health care.  Only a quarter of North Carolina medical providers accept new Medicaid patients.  One could also say that the ongoing glitches in N.C. Tracks, the state’s Medicaid payment system, do not help the argument for expansion.  

The widening safety net hurts the future well-being of individuals by preventing them from climbing the economic ladder and providing health care coverage for themselves.  Studies indicate that six out of ten people on Medicaid once had private coverage. 

Expanding Medicaid will only add more individuals to North Carolina’s dysfunctional medical assistance program.  State leaders need to focus on solving this problem, not funding the problem further.

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Katherine Restrepo is the Director of Health Care Policy at the John Locke Foundation. Before joining the John Locke Foundation, she interned at the Cato Institute under the direction of Michael Cannon, Director of Health Policy Studies. Katherine’s… ...

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