Study calls for NC Medicaid expansion

North Carolina could generate jobs and draw down federal funding now leaving the state if policy makers would expand Medicaid, according to a study. But state lawmakers have said they're not ready to consider expanding the program.

Posted 6:00 a.m. Dec 18, 2014 — Updated 3:55 p.m. Dec 18, 2014

Mark Binker

RALEIGH, N.C. — North Carolina would create 43,000 jobs and draw down $21 billion in federal funding over five years if state leaders agreed to expand Medicaid as allowed by the Affordable Care Act, according to a new report conducted by George Washington University researchers and sponsored by the Cone Health Foundation and the Kate B. Reynolds Charitable Trust.

"At county levels, if Medicaid is not expanded by 2016, Mecklenburg and Wake counties would crate about 4,500 fewer jobs each by 2020," says the report, which argues Medicaid expansion could drive down the state's unemployment rate.

The Affordable Care Act, what some people call "Obamacare," originally required states to expand the Medicaid health insurance program to cover all those earning up to 138 percent of the federal poverty wage, which amounts to about $28,600 for a family of three. Above that income level, people can get federal subsidies to buy health insurance though online exchanges. However, a U.S. Supreme Court decision gave states the option of expanding Medicaid to those who aren't now eligible but don't earn enough to qualify for subsidies.

So far, 27 states and the District of Columbia have chosen to expand Medicaid. The federal government will cover 100 percent of the cost of expansion for those states in 2015 and 2016 Starting in 2017, states will need to chip in 5 percent of the cost for new patients and 10 percent starting in 2020.

In 2013, North Carolina lawmakers opted not to expand, saying the state's troubled system could not handle more patients and worrying that the federal government would expand how much states had to pay as time went on. That means many families and most low-income adults remain ineligible for coverage under the state's health insurance program for the poor and disabled.

Problems with billing systems and cost projections have led to cost overruns so frequently that merely operating on budget was cause for Secretary of Health and Human Services Aldona Wos to say in September "we're ecstatic."

Despite Wos and Gov. Pat McCrory hinting that the administration may ask the General Assembly to consider some sort of Medicaid expansion, state lawmakers have repeatedly said they have no plans to expand.

"We've still got work to do...That's not even on the table," Rep. Justin Burr, R-Stanly, said Wednesday.

Asked about the argument in the Cone-Reynolds report that expanding Medicaid could spur job creation, Burr said it wasn't convincing.

"The argument that we're going to take money from the taxpayers and create jobs, that's never worked for me," he said.

Unsurprising, the Cone-Reynolds report argues that the bulk of the impact on jobs and the economy would come to the health care sector. Many doctors and hospitals currently provide uncompensated care that Medicaid expansion would cover.

"The lack of Medicaid expansion not only means that hundreds of thousands of low-income North Carolinians will remain uninsured, but also that hospitals, physicians' offices, clinics, pharmacies and other health care providers have less revenue and bear more uncompensated care," the report says.

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