NC Medicaid Expansion: Interstate 540 and the hypocrisy of the “federal money might not be there” argument

749px-I-540.svgIt’s a popular argument against NC taking federal money to expand Medicaid under the Affordable Care Act and it goes like this:  “Well, it’s a good thing to expand Medicaid to 500,000 working, low-income NC citizens, but we just can’t be sure that the federal government will always provide most of the money for the expansion so we had better not help our fellow citizens.”

Poking holes in this argument isn’t hard. After all, many states with Republican governors and legislators realize having the federal government cover 100% of the costs of the expansion for three years and never less than 90% thereafter is a good thing. Indeed, the NC Institute of Medicine estimated that NC actually saves $65 million over the next eight years because state and local governments are already paying so much for mental health and expensive ER care for folks who would get Medicaid coverage. And, of course, there’s the fact that the federal government has never not paid its share of the Medicaid program to any state since Medicaid’s inception in 1965.  Even during last year’s fiercely partisan partial federal government shutdown, Medicaid money kept flowing to the states just as it always has. Finally, of course, Medicaid expansion isn’t permanent. NC legislators can always change their mind and rescind the expansion if indeed, the “money isn’t there.”  Some states did put this in as part of their expansion programs, for example requiring that the expansion automatically end if the federal government’s share ever dipped below paying for 90% of the costs.

To these good reasons for expansion let me add one more:  For NC legislators to take the stance that we shouldn’t take federal money for major state-federal projects in NC because “it might run out” is highly hypocritical. Why? On the same day – in fact in the same hour – as NC House members passed the bill rejecting the Medicaid expansion in North Carolina citing as one of the major reasons that the federal money might “not always be there,” they passed another bill.  This second bill – taken up immediately after the vote blocking federal Medicaid money in NC, was on a bill paving the way for NC to obtain major federal government funding for the Interstate 540 loop south of Raleigh. [See the “Block Medicaid Expansion” bill here. See the I-540 bill here. See news coverage of the federal money and the I-540 bill here. See the NC House Calendar for the day in question here.]

The I-540 bill – of course – sailed through the NC House with no one questioning that the millions of dollars of matching federal investment for Raleigh’s latest loop freeway might not come through. Indeed, some House members stood up to talk about the importance of getting matching federal money for this southern loop when, just a few minutes before, they had been questioning whether matching federal money for health care would be available. How do I know this?  I was sitting in the NC House chamber and heard them speak.

A Medicaid expansion in NC would mean $15 billion in federal money coming to NC over the next eight years. States that have already expanded Medicaid this year are just starting to see the enormous economic benefits that sort of investment in a state can generate, not to mention the savings and improvements in general well-being of their citizens.  I know it’s hard to argue against this sort of investment in our state’s health, but politicians certainly shouldn’t try by using arguments that are so blatantly hypocritical.




  1. HunterC

    February 17, 2014 at 11:00 am

    Snippets from the audio archive of those back-to-back debates (publicly available on the NCGA website) would make a mighty good ad…

  2. genembridges

    February 17, 2014 at 12:37 pm

    There was also another option that was never considered. They could have pegged our own Medicaid expansion in a progressive fashion to the Federal Government meeting their end of the bargain first. Thus, if the possibility that the Feds didn’t meet their obligation, NC would not have to meet its obligation. That was an easy, simple fix that would have been a win-win for everybody involved, but they refused. Thus, their words were duplicitous. On the one hand, they professed concern about the well being of NC citizens, yet on the other, they did nothing to help NC citizens when they clearly could have done so in a way that would have assuaged their own concerns.

  3. LayintheSmakDown

    February 17, 2014 at 5:28 pm

    Yeah, 540 would actually have some positive economic impact vs the black hole into a toilet of Medicaid.

    As far as the Feds “never” not paying. That may be true, but the issue is when they take that 90% and decrease it to 80….70…..60 and so on. You guys may not have been around in the late 90’s but I was, and I fully remember DC decreasing the amount they pay while mandating more people be covered. What the NCGA has done is learn from that experience, and use some prudence and foresight to look out more than 8 years to the day when the Federal government has the debt spigot shut off.

  4. LayintheSmakDown

    February 17, 2014 at 5:30 pm

    Oh and 540 is far from “sailing” through. How long has this thing been in planning? And how long do you think it will take….if it happens at all?

  5. Alan

    February 17, 2014 at 5:41 pm

    LSD, what is it you have against people less fortunate in society?

  6. genembridges

    February 17, 2014 at 5:43 pm

    Not expanding Medicaid is the real “black toilet.” Expanding Medicaid helps the NC economy through job creation. It also creates and maintains a healthy workforce, which leads to increased productivity. The 540 issue affects the Triangle and only the Triangle in the long run, specifically Raleigh.

    That was before the ACA. That was before a healthcare law that included a particular funding level under the old FMAP. The ACA has revised the FMAP and enhanced it. You’ve assumed without benefit of argument that the future will resemble the past. That’s an obvious logical fallacy. Before uttering such obviously fallacious statements, perhaps you should read up on the FMAP’s history and how it actually worked then vs. the way it has changed.

  7. GOP Rules

    February 18, 2014 at 11:10 am

    Just to enhance the point LSD makes, note the troubles the Fed is having selling treasuries and the fact that China has dumped a big position. Things are already looking down for financing all things like Medicaid, SS, defense, other government handouts.


  8. LayintheSmakDown

    February 22, 2014 at 10:16 am

    Gene, where is your data on a true non-partisan site that documents Medicaid actually creates jobs? One more progressive lie, file it with globalwarmingclimatechange.


    February 23, 2014 at 10:45 pm

    NC GOPers want low income people to suffer. There’s no excuse to delude over “lack of federal funds” when NC can opt out of expansion.

    I’d have more respect for McCrory if he played the fear and loathing card like honest Mississippians.


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