Broken Supermajority Paves Way for General Assembly to Expand Medicaid

President Obama signs the Affordable Care Act in 2010 (Image)

“Democrats (and a few Republicans) have set their sights on a legislative goal that has long eluded them: Medicaid expansion. Introduced by Obama under the Affordable Care Act, the bill allows for states to elect to expand access to Medicaid, a government-subsidized health insurance plan for the impoverished.”

As a new wave of Democrats joins the North Carolina General Assembly, legislative priorities within the two chambers are beginning to change. Emboldened by the now-broken supermajority, Democrats, and a few Republicans, have set their sights on a policy goal that has long eluded them: Medicaid expansion. Under President Obama’s Affordable Care Act, states may elect to expand access to Medicaid, a government-subsidized health insurance plan for the impoverished. The federal government has pledged to match at least at least 90% of state funds devoted to expanding Medicaid, but it has also provided significantly higher funds in some cases. Already, 33 states have taken up this proposal, and five more have plans to do so. North Carolina may join those states soon.

Republicans and Democrats both have proposed Medicaid expansion plans. The Democratic plan, which has unanimous support from party members in the legislature, is introduced under House Bill 5 and Senate Bill 3. The proposal would expand Medicaid access for people who make 100 to 138% of the federal poverty line. Republicans have introduced a similar plan, but with a twist. Representative Donny Lambeth’s House Bill 662 - “Carolina Cares” would expand access to Medicaid with an added work requirement. Lambeth has expressed hope that this will be a more palatable option for Republican leadership, who have been anything but enthusiastic about the proposed legislation. With both options on the table, legislators face a tough choice that will likely result in a hard-fought political battle.

However the votes shake out, the current condition of health insurance in North Carolina is an important facet of the discussion. The state boasts the eighth-highest uninsured rate in the country, which stands at around 11%, or about one million residents. Healthcare premiums have also steadily risen among the poorest counties in North Carolina, taking a toll on already disadvantaged communities. Despite this, North Carolina continues to devote huge sums of money to healthcare costs. In 2016, the state spent 15.6% of the state GDP on healthcare, which amounts to $72.1 billion. About $12 billion of that goes to the Medicaid program, which is about 30% of the state budget, or about $7,000 per person. This remains significantly higher than the national average, which stands at around $6,000 per person. Currently, one must make under $569 per month in order to qualify for benefits (for a family with two children). This is a difficult requirement to meet. For an average work week of 40 hours a week per month and at the minimum rate of $7.25 an hour, one stands to make $1,160 a month. This is almost double the limit to receive benefits. The inefficiency of such a system shows -- the state spends a lot for benefits that few qualify for, while uninsured rates remain high and premiums steadily increase for the poorest citizens.

Others debate whether or not Medicaid expansion will solve these inequities to begin with. Some estimates, like those of the left-leaning North Carolina Justice Center, are hopeful that the bill will expand Medicaid access to around 500,000 people. The Henry Kaiser Foundation has a slightly more conservative estimate, hovering at around 340,000 more insured people. Yet in a state that has left one million uninsured, every person that obtains insurance counts. And like most social welfare policy, Medicaid expansion comes at a price. The Congressional Budget Office estimates that spending on Medicaid will increase at around 2.8% annually. The Cato Institute and other organizations argue this will be even worse than projected, because of claims that the CBO is underestimating per capita costs. The increase in spending will be somewhat offset by federal subsidies allocated to states expanding Medicaid coverage. As stated earlier, federal dollars will match at least 90% of expansion efforts. The federal government currently funds 66.3% of our Medicaid costs. This mark would increase if North Carolina approves the expansion, and the spike in costs might be worthwhile. In North Carolina, Medicaid covers many critical aspects of healthcare that are optional under the ACA, such as dental care, hospice, mental health clinics, and psychological clinics. Hospice care is especially important, because end-of-life care represents a significant portion of healthcare expenditures. Medicaid also helps subsidize prescription drugs, which are a growing problem for those who are uninsured. The current costs of these drugs are increasing exponentially, and they now represent 10% of all healthcare expenditures. If Medicaid is expanded, it will dramatically offset the costs of these drugs for low-income residents, which will help them receive the care they need.

North Carolina is faced with a momentous policy decision. Regardless of the outcome, this bold push for Medicaid expansion represents a new dawn for Democrats in the NCGA. Where once such legislation seemed like a pipe dream, the 2018 midterms have breathed new life into the party. The coming weeks will determine how the policy shapes out and just how many North Carolinians will be affected by the changes.