John Hood tries again with crowd out argument against Medicaid

Unfortunately, legislators in North Carolina have decided to refuse federal funds to extend Medicaid coverage to 500,000 uninsured people in our state. Thankfully, during debate on the bill they largely dropped some of their wildest talking points and stuck to the line about Medicaid in North Carolina needing reforms before it expands.

That hasn’t stopped John Hood from doubling down on crowd out as the biggest reason to block expansion. It turns out, according to his telling, that single-payer forces are attempting to extend Medicaid to more parents and uninsured adults as a secret plot to put insurance companies out of business.

In response I’ll just say that actuaries who get paid to model sources of insurance coverage show, in state specific estimates, that the number of people with private health coverage will increase after 2014, even with Medicaid expansion. Increasing the number of people with private insurance is a pretty roundabout way of getting to single-payer.

Also, most insurance companies think Medicaid expansion is a good idea. That’s because they recognize it will allow the uninsured to get coverage. That means if those families eventually change to private coverage they will be coming from Medicaid instead of from the ranks of the uninsured. Insurers realize that the uninsured have many more unmet medical needs than those on Medicaid. Someone coming from Medicaid to private insurance will use fewer health services. Insurance companies, we should note, would prefer not to go out of business.

With people getting premium support payments it is more cost effective to expand coverage through Medicaid. Legislators originally claimed that increasing the number of people on Medicaid is a huge problem because it would drastically shift the payer mix at hospitals across the state. These hospitals would still see the same number of uninsured patients and a large percentage of their private patients would switch to public coverage. Hospital financial officers and actuaries all dismissed that claim so politicians have dropped it. Let’s hope others follow suit.


  1. Doug

    March 1, 2013 at 4:32 pm

    The real argument needs to be how can we expand something that we already cannot afford? All this is being charged on the credit card to China, Japan, US Citizens, etc. Expanding something this corrupt and inefficent is the last thing we need to do.

  2. Frances Jenkins

    March 2, 2013 at 9:11 am

    I think Wos needs to bring in the FBI as well as the SBI. The problems deepen with past activites at DHHS. Anyone making a $150,000.00 and never showed to install computer programs should go to prison. Bluepoint/ Blueprint needs to take their invesigation to DHHS with a three page memo or at least a two page memo. I think two former governors should be held accountable. The number is now two billion in waste. So, Progressvie Pulse claim to fame with DHHS is to Demonize Wos for her dress policy and just plain Demonize her. I think she is the best thing ever to happen to NC. It is amazing thing to expect people to do their jobs and manage taxpayers money.

  3. Doug Gibson

    March 2, 2013 at 4:00 pm


    What we can’t afford is to spend more on health care for our people than any country in the world. If the U.S. spent the same per capita on health care as other industrial countries, we would soon have a budget surplus. I’m guessing that your problem, then, isn’t spending per se but the idea that the government should do anything that would allow it to pay less to private insurers and health care providers.

  4. david esmay

    March 2, 2013 at 9:15 pm

    Frances, stop with the non-sense, your talent for self deception is astonishing.

  5. Doug

    March 3, 2013 at 9:13 am

    You are correct there, but when is the government ever the solution to make a free market work? There is no situation where government gives you more of a product, at a higher price, and higher quality. Our current entitlements and government intervention are why we are where we are. All of us paying more to subsidize the Medicare patients whose payments are losses for the most part. Look at another example of government running up the cost of something: college education. Since all the easy loans began education costs have run up in double digits on a consistent basis while inflation is at 2-3%

  6. Doug Gibson

    March 3, 2013 at 11:58 am


    All I have to do is look at other countries. Their governments pay for health care, and they’re paying less per capita for it. And if you think free markets should help create a society with reasonable worker protections, environmental standards, and a social safety net, then as far as I can tell government is the only thing that makes free markets “work.”

  7. Frances Jenkins

    March 3, 2013 at 4:31 pm

    David take the middle school grammar program. The use of double negatives in the headline and the incorrect spelling of of aggressive has made you less of a liberal democrat.

  8. Doug

    March 4, 2013 at 3:14 pm

    All you have to do is look at the confiscation rate of the other countries, as well as the poor health care choices they have. You know, the rationing, long wait times etc. All of this is happening here already, not enough doctors currently exist to take care of the current Medicaid patients and other prospective doctors are deciding on other career paths, that is the free market response to government intervention…less of health care, poorer quality (less capable doctors make the cut), and more expensive (deficit/debt busting). Long story short, get back to me in a few years when we have our Greece crisis. I will try not to say I told you so…..wait, I will say I told you so.

  9. Frances Jenkins

    March 4, 2013 at 5:51 pm

    David is the school yard bully. However, it appears he is a little bit of a chicken. You know, all talk and bull and no substance.

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