Updated: May 10, 2022
An important component of the 2010 Patient Protection and Affordable Care Act (ACA) expanded Medicaid eligibility so low-income people living in households at 138 percent of the federal poverty level could get health care coverage. However, the Supreme Court ruled in 2012 that states could not be forced to expand Medicaid programs. Eighteen states decided not to expand, citing difficulty predicting and affording the costs. Federal funding covered 100 percent of the costs until 2016, with a reduction to 90 percent by 2020.
North Carolina’s Republican legislature passed a bill in 2013 that outright banned the expansion. The state has a history of moving slowly on Medicaid, being one of the last states to adopt it, in 1970, four years after the funding became available.
Most North Carolinians who have health insurance are covered by a private plan, either under an employer or marketplace exchange. Other coverage comes from Medicaid, Medicare, and military and veteran benefits. Yet 11 percent of the population remains uninsured.
Out of the 10.1 million North Carolina residents, 31 percent are low income (less than 200 percent of the federal poverty level), according to the Henry J. Kaiser Family Foundation (KFF). Eighteen percent of the population is covered under Medicaid and the Children’s Health Insurance Program (CHIP). While children and their parents/caregivers make up most of the enrollees, most of the funding goes to the disabled and the elderly. Some 69 percent of Medicaid in North Carolina pays for acute and long-term care. Click here for details of who is covered under Medicaid in North Carolina and how the funding is spent.
If North Carolina were to expand Medicaid, 208,000 more low income people who have no other option for coverage could receive health care coverage, with a positive result for the state as a whole. A KFF review of 202 studies of the impact of Medicaid expansion published between 2014 and February 2018 found:
Significant gains in coverage and reductions in uninsured rates, particularly among low-income and vulnerable individuals.
Greater access to care, use of services.
Positive relationship to affordability of care and financial security.
Mixed results on capacity for providers to meet the need for services.
Participants said their health had improved following the expansion. (Long-term studies will be needed to evaluate this.)
Initial Medicaid enrollment growth and state and federal spending exceeded initial projections in many states. While state spending from state funds didn’t increase, that is expected to change as the federal share for the expansion drops to 90 percent through 2020.
Reduced uncompensated care costs for hospitals and clinics and positive or neutral effects on employment and the labor market.
Disproportionately positive impact in rural areas
But were states like North Carolina that initially rejected Medicaid out of fear that costs would be difficult to predict and potentially overwhelm their budgets correct? A report from the Brookings Institution found that even as the federal contribution drops to 90 percent, state “costs are likely to remain modest, despite increased enrollment.”
Over the next decade North Carolina stands to lose $36.1 billion by not participating in Medicaid expansion. In addition to providing basic health care, Medicaid funding could be used for targeted items such as funding substance abuse treatment in the fight against the opioid epidemic, tobacco cessation education and treatment and more.
When Gov. Roy Cooper campaigned in 2016 on a platform to expand Medicaid, he said that he was “appalled by North Carolina’s failure to expand Medicaid to its neediest residents, especially when our tax dollars are already going to pay for it in other states.”
Once he took office, Cooper was determined to expand Medicaid through executive action. He said the 2013 law banning Medicaid expansion violates the governor’s “core executive authority” to accept federal funding and protect the public’s health. The expansion remains in limbo following a challenge by lawmakers.
However, as a result of the November elections for state House and Senate seats, Republicans no longer hold a supermajority under which they can overrule any gubernatorial veto. While Republicans still hold a majority of seats, the 2019-20 General Assembly is undoubtedly expected to be more moderate and potentially more receptive to expanding Medicaid access.
Virginia (General Assembly bill) and Idaho, Utah and Nebraska (ballot initiatives) have recently reconsidered their positions on Medicaid expansion and determined that providing low income individuals with access to health care is a good thing for their states. North Carolina should join them.