EDITOR'S NOTE: Mark A. Hall is a Professor of Law and Public Health at Wake Forest University, where he directs its Health Law and Policy Program. He is also a Nonresident Senior Fellow in Economic Studies at the Brookings Institution and an elected member of the National Academy of Medicine. His report, "Do State's Regret Expanding Medicaid?" was released last week. The Affordable Care Act (ACA) offers to pay 90 percent of the costs of expanding the Medicaid health insurance program to cover all people near poverty. North Carolina is one of 18 states that, so far, have declined to accept this expansion funding, which could help several hundred thousand people who lack insurance. Now that Congress has failed to repeal or replace the ACA, government officials are considering whether to implement Medicaid expansion, using the more flexible approaches now permitted by President Trump’s administration.
One reason frequently cited for not expanding Medicaid is the claim that other states that expanded now regret it because of unexpectedly high costs. Recently, I reviewed the evidence of this claimed regret,
and found it to be seriously lacking. Instead, both red and blue states that expanded continue to support Medicaid expansion.
Medicaid expansion did produced much greater enrollment in many states than was expected at first, but this increased enrollment is not likely to translate into substantially higher costs than states expect going forward.
- First, we now have several years of actual experience to draw from in making more accurate future projections.
- Second, states initially overpaid for newly enrolled people, but now have reduced these payments once they learned the actual costs of treatment.
- Third, states that expanded found that the increased federal support reduced some of what they previously were paying in various related programs, such as for mental health and substance abuse treatment.
Undoubtedly some state officials who initially opposed Medicaid expansion still do. However, no Republican governors who supported expansion have changed their minds. Instead,
most of them they have
reaffirmed their
commitment to Medicaid expansion. Also, no states that previously expanded and included “trigger” provisions that allowed them to “pull the plug” if it proved to be a mistake, have done so. Instead,
several Republican state
legislatures have
ratified or reenacted their expansions.
One reason for continued and growing support for Medicaid expansion is that the Trump administration now gives states more flexibility to include
elements that better control costs, such as modest patient cost-sharing. Another reason is that the substantial increase in federal funding helps to
stimulate much-needed economic growth, which creates jobs and raises more tax revenue. And, last but not least, there are
obvious health benefits for previously uninsured people.
With this strength of evidence, one has to wonder about the contrary claims that Medicaid expansion is a
“proven disaster.” The primary source is the ultra-conservative
Foundation for Government Accountability, which
campaigns aggressively against Medicaid expansion across the country. Several respected sources (including a
federal judge, a
Pulitzer prize journalist, and both
liberal and
conservative legislators and
analysts) have concluded that this source produces and disseminates information and analysis that, based on "
even a cursory review,” is “not competent," "
bogus," “
highly misleading,” “
fundamentally flawed,” “
oversimplistic and exaggerated,” “
absurd,” “
a parade of alternative facts designed to obscure the simple truth,” “
misrepresents or omits data,” and presents “
a myriad of misleading and irresponsible statements.”
We should not reflexively discredit policy advocates simply because of their views or affiliations, but, in this case, there
are documented reasons from scientific studies to
question the accuracy of claims that Medicaid expansion would cost North Carolina a great deal more than objective analysts would now project.
While it is unlikely that Medicaid expansion in North Carolina will turn out to be entirely free, based on several years of actual experience in expanding states the probable costs will be quite low in comparison with the economic and public health benefits.
