SHARON DECKER: It's time to expand Medicaid coverage, boost the state's economy

There’s a lot riding on a strong, post-pandemic rebound for North Carolina’s economy: family finances, job growth, business bottom lines, even political fortunes. And while some indicators are positive, our state is lagging on an issue that could trip up our recovery and leave our economy stumbling for years to come.

We have a health-care problem in North Carolina that brings with it serious economic consequences. Even worse in the competitive world of business, other states — competing states — have moved to definitively deal with similar challenges. They know that a healthier population means a more robust economy.

The problem is our state’s health-care coverage gap, which refers to people who earn too much to qualify for Medicaid, but make too little to qualify for a subsidy on the health insurance marketplace. The Kaiser Family Foundation has estimated that if North Carolina took action to close its coverage gap, more than 600,000 people would gain health insurance and access to proper care.

This group includes service workers, small-business owners and child-care providers. They are parents raising small children. More than 12,000 are our veterans. And, most important to the theme of this piece, they are a large chunk of North Carolina’s workforce and consumers.

“The health-care sector is in many ways the most consequential part of the United States economy. A well-functioning health-care sector is therefore a prerequisite for a well-functioning economy,” stated a 2020 report from The Brookings Institute.

When people can get the health care they need, they live healthier lives and are more productive workers. Closing the coverage gap would save our businesses $1,685 in lost productivity per employee per year, according to a Centers for Disease Control and Prevention estimate.

“A healthier workforce is a more productive workforce,” stated a report from the Harvard School of Public Health almost a decade ago, noting that “the indirect costs associated with preventable chronic diseases — costs related to worker productivity as well as the resulting fiscal drag on the nation’s economic output — may exceed $1 trillion per year.”

Of course, access to quality, affordable health care makes preventing chronic diseases infinitely more likely.

By not providing help to those who have fallen into the coverage gap, the state will miss out on a potential 37,200 new jobs and more than $11.7 billion in state business activity. Reliable health insurance makes a huge difference for avoiding foreclosures and evictions, which disrupts the ability to work and contribute to the economy. In states that have used Medicaid expansion to close the coverage gap, people are 25% less likely to miss a rent or mortgage payment.

Thirty eight states have already moved to close their health-care coverage gaps through a partnership with the federal government.

Declining this opportunity puts North Carolina at an economic disadvantage. The federal government has long been willing to cover 90% of the costs for states who close their coverage gap. Federal law dictates this funding level will not decrease.

And while the offer was already wildly advantageous to states, now it’s even better.

The Covid-19 Relief package provides states with a new incentive to close their coverage gaps: a two-year, 5% increase in the federal match rate for Medicaid. For North Carolina, that would mean an influx of between $1.7 billion and $2.4 billion over the next two years. The N.C. Department of Health and Human Services estimates the state’s cost for closing the gap would be roughly $500 million annually. That means if we close the gap, additional funding of $700 million to $1.4 billion will come to our state above and beyond the cost to ensure health care for our neighbors.

Health, it turns out, has a lot to do with creating wealth. North Carolina cannot afford to be left behind as the rest of the country guns its economic engines. Coming to agreement on our state government’s next budget affords our elected officials an opportunity to use the federal offer to close the coverage gap. I urge them to get down to business and make it happen.