NC Budget and Tax Center

The real facts on how Medicaid Expansion will help North Carolina

Here are the real facts about how Medicaid Expansion can help people in North Carolina live healthier lives and have the health insurance that they need.

FACT: Medicaid coverage improves health and financial security.

Health insurance provides financial security by protecting people from catastrophic, unexpected medical expenses. Medicaid serves this purpose by protecting individuals and families with low incomes. Numerous studies show that poor health is associated with a higher risk unemployment and job loss.

Many studies, including the Oregon Health Insurance Experiment where low-income individuals were randomly selected to receive Medicaid coverage, point to the benefits of improved health outcomes as a result of health insurance coverage. Research findings on the clinical outcomes from participants in the coverage experiment include an increase in overall health care utilization, self-reported health, and reduced financial strain. Other studies have found reduced mortality rates and improvements in self-reported health among adults.

FACT: Expanding Medicaid will allow North Carolina to serve more people and won’t harm people currently covered by Medicaid.

Additional federal dollars provided through a higher state match will provide the necessary resources to serve more people with the health care that they need. In states that have expanded Medicaid, researchers have found an increase in the number of resources available to patients. In Ohio, physician and nurse participation in the Medicaid program increased after expansion to meet the increased demand. After Michigan expanded Medicaid, the availability of health care appointments for Medicaid enrollees improved.

In North Carolina, providers already provide health care to the uninsured, they’re just not getting paid for it. Moreover, providers who do care for Medicaid enrollees in North Carolina currently receive low reimbursement rates because the NC General Assembly has enacted legislation resulting in rate reductions.

Reducing the number of uninsured will strengthen the health care infrastructure that many North Carolinians currently depend on for access to care because it helps rural and safety net institutions keep their doors open. Research shows that institutions in non-expansion states report continued financial distress.

Many studies have looked at whether closing the coverage gap “crowds out” private insurance by compelling privately insured individuals to switch their insurance coverage to Medicaid. Three separate comprehensive studies have found no evidence of this phenomenon, and there is no evidence that there is significant movement from private insurance to Medicaid after expansion. Looking across 24 expansion states, rates of private insurance were unchanged after Medicaid expansion.

FACT: Medicaid expansion is a good financial deal that will create a healthier population.

Fully closing the coverage gap will allow North Carolina to generate the greatest health benefits for residents and communities, saves taxpayers dollars that can redirect to other community priorities, and allows the state to draw down available federal dollars to improve care and stabilize community health providers in high need areas. The federal government has provided a durable commitment to fund 90 percent of the costs of delivering health care to this population in 2020 and beyond.

North Carolina taxpayers are already paying more than $1 billion a year for Medicaid expansion in other states. Our state has the tools to generate the necessary state match through support from providers who will gain revenue on net from increased funding and patient revenue. Doing so will allow us to bring those federal tax dollars back home.

The reality is that North Carolinians are being needlessly blocked from accessing the health care they need and the healthier lives they deserve. The stories of the harm of living in the coverage gap make clear that their challenges not only affect them and their families but their broader communities.

As North Carolina falls further and further behind the 36 states, plus D.C., that have adopted Medicaid expansion and are addressing the damaging effects of high levels of uninsured, it is clear that our health care can’t wait.

Suzy Khachaturyan is a Policy Analyst at the Budget and Tax Center, a project of the North Carolina Justice Center.

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