North Carolina’s Failure on Medicaid Expansion

October 3, 2022

Naming the single greatest failure of leadership in North Carolina’s state government over the last decade would be a difficult task. Among the candidates would have to be the openly racist “Monster” voting law; gutting the state’s once-enviable unemployment insurance system in 2013 (which wound up having disastrous consequences when it was really needed during the COVID pandemic); or the state legislature’s long-term starvation strategy towards the public schools system.

But looming behind all of them is an even greater failure: state lawmakers’ refusal to expand Medicaid.

The failure by North Carolina’s politicians to expand Medicaid has directly cost lives. Despite a slam-dunk case for expansion on fiscal, economic and even moral grounds, the leaders of the state legislature have refused to act – and are still refusing today. The reason why is simple and twofold: (1) a rigidly far-right ideological Republican legislative caucus that is the product of a decade of gerrymandering; and (2) a seamy pay-for-play relationship between that caucus and corporate healthcare lobbyists.

Every few months, new rumors swirl in Raleigh political circles about an impending deal on Medicaid expansion. Without exception, these rumors have come to naught. So will North Carolina see Medicaid expansion in the near future? It’s always possible… but we’re doubtful. Here’s why.

Quick refresher: what is Medicaid expansion?

Since its inception in 1965, Medicaid has been a federal program that helps provide healthcare to Americans with low incomes. In 2017, it provided free health insurance to 74 million Americans, and paid for fully half of all births in the U.S. in 2019. Much of that is due to the Affordable Care Act, President Barack Obama’s signature achievement, signed into law in 2010 (and which still, despite some claims to the contrary, remains in effect).

In its simplest form, the Affordable Care Act expanded the definition of who was eligible for Medicaid so that more low-income Americans could access health coverage. Medicaid is funded by the federal government, but managed by each state, and those states may choose whether to “expand Medicaid” or not. They can choose to keep the former, more restrictive eligibility (and thus force more people to go without health insurance), or “expand” the eligibility. The federal government pays 90% of the cost for those newly eligible, and states must pick up the remaining 10%.

To date, 38 states have expanded Medicaid to their citizens, while only 12 have not. According to the Department of Health and Human Services, 21 million low-income Americans have health care coverage today as a result – a massive and unqualified success. There’s only one problem: North Carolina is one of the 12 whose leaders have obstinately refused to budge.

Medicaid expansion is a slam-dunk

The case for any state, but especially North Carolina, to expand Medicaid is a slam-dunk.

Over a million North Carolinians lack health insurance, and especially those in rural counties.

According to the U.S. Census Bureau, 10.4% of North Carolinians had no health insurance coverage whatsoever as of 2021. That is well over one million men and women, including over 100,000 children. This is a travesty. Lacking health coverage does not simply mean missing routine doctor visits; it also means delaying or forgoing altogether needed medical care, whether for the flu, COVID, a chronic condition or injury, or for mental illness. (This also means no dental care, which is a very serious and frequently overlooked problem.) People in this situation frequently develop more serious ailments that require serious – and much more expensive – treatment down the road. It not only badly impairs their quality of life, but it results in thousands of North Carolinians (1,200 annually, by one estimate) dying unnecessarily.

All of the above is more than reason enough to expand healthcare coverage to everyone. But there are many more:

  • Studies show that Medicaid expansion leads to lower health insurance premiums for all, since it brings more consumers into the insurance market.
  • Experts forecast that expanding Medicaid in North Carolina specifically would inject billions of dollars into the state economy, generate tens of thousands of jobs, and boost the state GDP
  • The State of North Carolina would actually save money by expanding Medicaid: approximately $1.5 billion dollars to the General Fund just in the first two years, according to the legislature’s own non-partisan Fiscal Research Division. And that’s before considering the indirect economic impact of the new influx of federal funds and jobs.

It was mostly this last point that persuaded some long-reluctant Republican state lawmakers to publicly voice a new openness to expanding Medicaid over the summer. State Senate Leader Phil Berger, in an astonishing reversal, announced that he had decided to support of Medicaid expansion, and essentially admitted that Democratic Governor Roy Cooper and other champions of the issue had been right all along. His State House counterpart, Speaker Tim Moore, announced that he, too, was reversing himself and now supported Medicaid expansion.

Unfortunately, the early hopes of an imminent deal turned out to be very premature.

North Carolina still has not expanded Medicaid

Despite negotiations described as “intensive” during the budget process and over the summer, North Carolina’s state lawmakers still have not expanded Medicaid.

Unlike many policy conflicts, this one is not a matter of Republicans and Democrats at loggerheads. After all, Republicans control both chambers of the state legislature. They could pass a “clean” Medicaid expansion bill tomorrow, if they wanted to. But they haven’t, which indicates that the purported openness to Medicaid expansion is quite a bit more shallow than advertised.

The impasse between State House and Senate Republicans comes down to the state’s “certificate of need,” or “CON” law. CON laws get rather technical, but are essentially a tool most state governments use to oversee the distribution of healthcare equipment and services. Like North Carolina, 34 other states have a CON law on their books too. (FYI: 29 of those states have also expanded Medicaid.) But Phil Berger insists that any deal to expand Medicaid also include “reform” of the state’s CON law (which means, in this case, mostly getting rid of it). Tim Moore would prefer to deal with CON laws separately, instead of as a package with Medicaid expansion.

And that’s really it. A hangup over what to do about the state’s CON law is the reason why North Carolina still has not expanded Medicaid.

The underlying reason for the impasse is depressingly familiar: Republican leaders in the Senate (Berger) and House (Moore) are aligned with different healthcare special interest lobbies on opposite sides of the issue. Yet again, the interests of deep-pocketed corporate special interests are overriding those of the people of North Carolina.

Hope springs eternal for a grand bargain that will bring badly-needed Medicaid expansion to our state. Yet every time credulous observers have prematurely given Republican leaders credit for almost coming to a deal, nothing has ultimately come of it. Perhaps they will surprise us in the special session promised for December – but don’t hold your breath. The Republican House and Senate caucuses’ capacity to craft even basic policy has been on a steady decline as their ranks of radical right-wing know-nothings have grown in power. What are the chances it’ll be different this time?


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