Medicaid’s “tremendous impact”
At a campaign stop on Wednesday, gubernatorial candidate Pat McCrory joined the likes of Texas Governor Rick Perry and Louisiana Governor Bobby Jindal in pledging not to implement the two most important part of the Affordable Care Act: state health exchanges and the Medicaid expansion.
His reason for opposing the Medicaid expansion provision? He’s afraid it will have a “tremendous impact on our Medicaid in North Carolina.”
Yes Pat, of course it will have a tremendous impact – that’s the point.
Presumably, what Mr. McCrory meant to say was that the expansion would have a negative fiscal impact on the state, ala the claims of other Southern Republican Governors in recent days. He would, alas, be as wrong as everyone else who makes this claim.
According to a report released yesterday based on numbers from the Congressional Budget Office (CBO):
“Medicaid expansion will add very little to what states would have spent on Medicaid without health reform, while providing health coverage to 17 million more low-income adults and children. In addition, the Medicaid expansion will reduce state and local government costs for uncompensated care and other services they provide to the uninsured, which will offset at least some — and in a number of states, possibly all or more than all— of the modest increase in state Medicaid costs. Expanding Medicaid is thus a very favorable financial deal for states.
A very favorable deal indeed, considering that the additional cost to the states represents only a 2.8 percent increase in what they would have spent on Medicaid from 2014 to 2022 if the ACA had never been passed according to the CBO.
But that number only focuses on what is spent on Medicaid, not how much is saved by giving all of these people regular access to medical care.
If you take into account the overall spending of states for medical services, the extra expenditures drops to an average additional cost of 1.6 percent above current spending levels. This means that actual “extra” money that the state will have to kick in is minuscule in comparison to the level of additional funding they will receive as a result of the program.
So, when Pat McCrory says that the ACA will have a “tremendous impact” on North Carolina’s Medicaid system, he is totally, completely, 100% correct.
Now, please excuse me while I wash my mouth out with soap.
This is a cross-post from the Action NC blog.