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According to his public schedule Gov. Pat McCrory will reject funds to insure 500,000 more people in our state at a closed door bill signing at 4:30pm today.

We have detailed the tremendous costs to the state of rejecting this federal money. It will mean more people delay necessary health care treatments. It will mean a population that is sicker and dies sooner. It will mean rural hospitals will continue to struggle with a mixture of federal cuts (including some in sequestration) and financial pressure from treating the uninsured. It will mean that our Community Health Centers will continue fighting to stay afloat. It will mean that many of the terrible health disparities that exist in our state will persist.

Remember, Gov. McCrory did not have to sign this legislation. He could have vetoed it. He could have let it take effect without his signature. Instead, he is lending this ill advised move his active endorsement. It is too bad that he won’t face the public as he writes them off.

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Nikki, a 12-year-old Charlotte resident, is a top student and talented musician. She also has Type 1 diabetes. Dealing with a chronic medical condition is enough to keep any parent up at night. Before health reform, anyone with a chronic condition was also at risk of getting locked out of the insurance system.

This is one family that is glad they no longer have to fret about obtaining insurance coverage. Here is their story.

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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.