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What if Medicaid is "welfare?"

Updated: May 9, 2023

North Carolina recently expanded Medicaid to more than 600,000 people. The state-federal partnership provides health insurance to the needy. The move will bring billions in federal dollars to the state because states cover only 10 percent of the expansion costs, and the federal government covers 90 percent.

North Carolina is one of the last states, 40th, to expand Medicaid. The move is too-little-too-late for East Carolina University’s rural health system, which lost $46 million last year. The system recently closed five clinics— a women’s care clinic in Williamston, an urgent care in Wilson, and family medicine clinics in Jacksonville and Aurora plus a behavioral health center. (The behavioral-health beds will go to a new facility under development in Greenville.)

Eleven rural hospitals have closed in North Carolina since 2005. Rural residents are 40% more likely to be uninsured, and eligible for Medicaid. Rural health clinics serve lots of workers who fall into coverage gaps, possibly needing two or more jobs to afford health care—for instance, child care, restaurant, and nursing home workers.

Republican opponents to Medicaid in Congress view it as “welfare.” The program covers one in five Americans, and funds long-term care for most Americans.

House Republicans have proposed a Medicaid work requirement, part of a deal for increasing the federal debt limit, but how much could that help? Two-thirds of Medicaid spending is concentrated on the elderly and disabled; most able-bodied Medicaid recipients already work.

A Kaiser Family Foundation (KFF) poll finds broad public support for Medicaid. Two-thirds of U.S. adults say they’ve had some connection to Medicaid, including health insurance (59 percent); pregnancy, home health, or nursing home care (31 percent); coverage for a child (31 percent); or to help paying Medicare premiums (23 percent.)

Seventy-nine percent of Democrats and 60 percent of independents view Medicaid as a “government program helping people pay for health insurance,” while 54 percent of Republicans, see it as welfare. Republicans with a connection to Medicaid—say, an elderly loved-one in a nursing home—are more likely to see it as a program that helps people afford health insurance.

Another KFF study found that Medicaid expansion improves hospital and provider balance sheets, still challenged by lingering pandemic effects, declining federal relief, and pressure on wages.

Recent studies show benefits from Medicaid expansion include lower overall mortality, reduced food insecurity, poverty, and home evictions, as well as self-reported improvements in health and healthy behaviors. As the insurance covers more and more poor people, hospitals’ uncompensated care costs decline; states also save on mental and behavioral health programs, and costs of covering the incarcerated. The 90 percent of Medicaid money provided by federal dollars represents, on average, 55.1 percent of state budgets. As that money circulates, the spending generates economic benefits.

Health insurance needs aren’t going away. North Carolina is coping with an opioid epidemic—overdoses rose by 22 percent in 2021, according to the N.C. Department of Health and Human Services, the latest figures available. About 40 percent of overdose patients in emergency departments are uninsured, and they require follow-up care.

Medicaid may be welfare—the health, happiness, prosperity, of a person, group, or organization—it’s cost effective, improves health outcomes, and lives. We’re all better off.

Betty Joyce Nash reported for the Greensboro News & Record and the Hendersonville Times-News before moving to Virginia where she worked as an economics writer for the Federal Reserve Bank of Richmond. She co-edited Lock & Load: Armed Fiction, an anthology of literary short stories that probe Americans' complicated relationship to firearms. (University of New Mexico Press, 2017.)

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