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Wake Forest researchers: NC should close the Medicaid gap now

Medicaid expansionStill more experts have weighed in in favor of following the lead of dozens of other states and expanding Medicaid in North Carolina. A new report by a pair of Wake Forest University professors of health law says that North Carolina leaders are making a mistake by refusing to act. Click here to read “Medicaid Expansion Costs in North Carolina: A Frank Discussion.”

Here’s the conclusion:

“There is no denying that Medicaid expansion in North Carolina will have some costs. And, for those who distrust the federal government with a fiery passion, there may be nothing that can convince them to consider this major expansion of federal support. However, a more dispassionate examination of the issues greatly reduces well-founded concerns over expansion costs to the state.

Several expert studies have calculated what actual expansion costs would be, and what portion of those costs the state would actually bear. Expansion funding, like an iceberg, has both a visible tip, and a much larger hidden part below the surface. The tip of expansion costs, which are several billion dollars a year, is the 10 percent that the state would have to pay. The federal government pays the rest. That much larger, 90%-hidden part of the iceberg represents not a cost to the state, but instead money coming into the state.

This new federal funding melts throughout the state’s economy. The increased federal funds would create new well-paying jobs and boost economic activities that increase tax revenue without increasing tax rates. Expansion would also create savings for the state by reducing what it has to spend both on existing Medicaid recipients, and on other non-Medicaid programs like mental and substance abuse treatments and medical care for inmates. And, federal funds reduce what state and local governments currently pay for free care that now goes to low- income people who lack insurance. All told, these economic benefits and savings to state and local governments will approximately equal the extra costs to the state of expansion.

That math works as long as the federal government does not reduce what it will pay for North Carolina residents on Medicaid. Although the ACA has survived every one of the legal and political challenges it has faced, there is no guarantee that federal support will continue forever. However, it would be both illogical and extremely difficult for the federal government to back out of its deal with the states now. Even if some risk remains, states are not defenseless; they can take several steps to protect themselves, in the form of triggers, sunsets, or waivers.

The question, then, for the people and the leaders of North Carolina, is whether a small cost and a small risk are prices worth paying to provide insurance coverage to several hundred thousand people who cannot afford coverage on their own, even though the majority of them are working.”

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