|
 Now imagine you’re going by a marina, and you see a small yacht
for sale. In a strange fit of daring, you buy it! The owner is offering special
financing for the first few years, and it seems like this new boat fits within
your budget. What happens?
At first, it’s exciting but we all know the saying: The two best days in a boat
owner’s life are the day they buy the boat and the day they sell it.
After a few trips on the water, reality sinks in. The engine fails in the middle
of the lake, and you need a tow back to shore. Your friends ask you to take the
boat out, encroaching on your fishing time. An issue arises with the electrical
system resulting in a costly repair. The upkeep costs are more than you
bargained for, it’s manageable for now because of the sale, but that special
financing is going to expire.
It might seem hard to believe, but today, North Carolina finds itself in much
the same position in relation to the federal government and Washington is trying
to lure them into a trap.
Specifically, the Biden administration is offering states a five-percentage
point increase in the federal government’s Medicaid contribution in exchange for
expanding the program to nearly 900,000 able-bodied adults.
Branded as an “incentive,” a more apt word would be “bait.” For one thing, the
increased match for traditional populations only lasts two years. More
importantly, it doesn’t come close to covering the cost of the additional
population, which have consistently shattered initial estimates in expansion
states: On average, twice as many people have enrolled at a cost 157% greater
than projected.
Even with the federal carrot, North Carolina would be facing a net state-level
cost of expansion of roughly $6 billion over 10 years. A term-limited governor
like Roy Cooper who doesn’t have to deal with the long-term budgetary
consequences may enjoy the plaudits that follow an infusion of federal cash –
but his constituents will be left holding the bag.
At this
point, you may object: maybe expansion is expensive, but isn’t it worth shelling
out money to help people get coverage? Life is more than dollars and cents.
[to top of second column] |
But the truth is Medicaid expansion often does more
harm than good. Because Medicaid only pays providers a measly 60% of
private insurance rates, only 71% of providers nationwide currently
accept it. This frequently makes it difficult for enrollees to
access care. Adding yet more people to the program promises to make
this bad problem worse. In any case, as of 2019, no
fewer than 63% of North Carolina residents that would qualify for
Medicaid under an expansion already have private insurance, whether
through an employer or on the individual market. What’s more, nearly
320,000 are either enrolled in, or qualify for, individual coverage
free of charge – while thousands more can receive premium assistance
that substantially reduces their costs.
 Let that sink in: A sizable majority of expansion-eligible North
Carolinians are already served by superior private insurance with
vastly wider provider networks – and a significant portion of those
are receiving it for free.
North Carolina’s leaders should not commit its taxpayers to untold
future expense for such dubious benefits.
No amount of federal largesse can change the fundamental problem of
the Medicaid program: It barely has the money to meet the needs of
those it was originally created to serve. It’s the first or second
largest budget item for states, and North Carolina is no exception.
Nationwide, Medicaid is already the nation’s largest payer of
long-term care, and thanks to an aging population, those costs alone
are expected to balloon 500 percent by 2050. In
other words, the program’s long-term viability to meet the needs of
its traditional populations – some of the most vulnerable in America
– is far from guaranteed. Piling yet more weight atop a program
already groaning under its own weight is – to put it charitably –
short sighted. We whistle past the graveyard at our own peril.
The Biden administration’s bait clothes itself in the language of
federal generosity and reasonableness. Like the new boat purchase,
adopting Medicaid expansion is satisfying at first. Unlike the boat,
however, North Carolina will be stuck with Medicaid expansion.
Trevor Carlsen is a senior research fellow at the
Foundation for Government Accountability. |
