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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.

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It is safe to assume that John Hood, president of the John Locke Foundation, has easy access to Gov. Pat McCrory and legislative leaders in Raleigh. That means he has more insight than the rest of us into what motivates Republican lawmakers. That is why I found his column today interesting.

Hood explains to the rest of us why Republicans rejected a health benefits exchange and the Medicaid expansion. Just to be technically correct, the legislature did not reject a state exchange this session. It’s too late to set up a state exchange for 2014. Instead, they decided to surrender state functions we are already performing to the federal government. Now back to the point of this post. Hood says the reason Gov. McCrory and the legislature do not want a state exchange is because they buy into a slightly wacky legal theory pushed by the Cato Institute that says in a federal exchange people can’t get subsidies and the employer and individual penalties don’t apply.

Let’s set aside the legal reasoning here. Most lawyers reject this idea, but with our current Supreme Court I don’t take anything for granted.

What is more intriguing about the column is Read More

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It feels a bit like legislative leaders took Gov. McCrory to the edge of a cliff and asked if he would prefer to jump or be pushed off. This morning he decided to jump.

Still, a few points need explanation. McCrory says he opposes an exchange because the state has not done enough work to ready itself. That claim strains credibility.

No one suggested the state would set up a state exchange in 2014. In fact, that’s not possible. What we wanted was to keep a partnership exchange. A partnership exchange is a federal exchange with the state keeping two critical functions. The first thing we would do under a partnership is consumer assistance. We are already doing that and we are a national model. We are more than ready to take on that duty, but now Washington, DC, will run that for us. The second is reviewing our own insurance plans in the exchange. The Department of Insurance has done this for years and is obviously ready to do it in 2014. Again, this goes to Washington.

After running consumer assistance and plan review in 2014 the question is then do we want to take over the exchange in 2015 or have the feds continue to operate it for us.

On Medicaid the question of long-term costs can be addressed in several ways. You could sunset the expansion without penalty once the federal match moves lower than 100 percent and reassess the financial implications to the state at that time. Or, like many states, you could scale back the expansion automatically if the federal matching rate dips below what is promised now.

If you skip out on the first three years of expansion you miss the $124 million in savings to the state and the 25,000 jobs that will be created.

The legislature clearly forced Gov. McCrory’s hand here. But it’s still important to note that the reasons given in his letter to oppose a partnership exchange and the Medicaid expansion are not reasons at all.

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The News & Observer ran a story this weekend about an online petition hosted by Sen. Phil Berger that includes claims about health reform that national health law expert Mark Hall labeled “absurd lies”. WRAL also covered the petition in an online story.

Here is the original petition.

If you’ll notice this petition says:

Please help me stop Obamacare in North Carolina. We already passed a bill in the Senate. Now it’s up to the House and the Governor to protect us from:

Here is the new version.

You’ll notice the change to:

Please help me stop Obamacare in North Carolina. We already passed a bill in the Senate that protects us from:

Apparently Speaker Tillis and the Governor did not like being called out in Berger’s original petition. So, he kindly removed that language while keeping the “absurd lies”. That’s important because outright deception is not that common among politicians. It is true that many elected officials engage in some serious spin. But there is no nugget of truth to the claim that health records will be turned over to the IRS. I don’t think any person who wants to be taken seriously would claim that the form going to the IRS counts as a health record.

Why not just debate health reform on its merits? This sort of misrepresentation doesn’t help anyone.

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Arizona Gov. Jan Brewer became a conservative hero when she was able to get her state to pass one of the harshest immigration laws in the nation. On Monday she gave her State of the State address and spoke in-depth about the Medicaid expansion.

Here is what she said in part:

“By agreeing to expand our Medicaid program just slightly beyond what Arizona voters have twice mandated, we will: Protect rural and safety-net hospitals from being pushed to the brink by their growing costs in caring for the uninsured; Take advantage of the enormous economic benefits – inject 2 Billion dollars into our economy – save and create thousands of jobs; and, Provide health care to hundreds of thousands of low-income Arizonans. Saying ‘no’ to this plan would not save these federal dollars from being spent or direct them to deficit reduction. No, Arizona’s tax dollars would simply be passed to another state – generating jobs and providing health care for citizens in California, Colorado, Nevada, New Mexico or any other expansion state… With this move, we will secure a federal revenue stream to cover the costs of the uninsured who already show up in our doctor’s offices and emergency rooms… Weigh the evidence and do the math. With the realities facing us, taking advantage of this federal assistance is the strategic way to reduce Medicaid pressure on the State budget. We can prevent health care expenses from eroding core services such as education and public safety, and improve Arizona’s ability to compete in the years ahead. I’m committed to doing this, and I want you on my side. Let’s work together in an atmosphere of respect and do what is BEST for Arizona.”

North Carolina’s expansion would be more dramatic than in Arizona, which means it will cover more people, and, instead of bringing in $2 billion we stand to gain more like $15 billion in federal funds. If Medicaid expansion makes sense in Arizona, it makes even more sense in North Carolina.