Medicaid trap awaits McCrory

Published November 24, 2014

by Brian Balfour, Civitas  Institute, printed in Charlotte Observer, November 23, 2014.

If he’s not careful, Gov. Pat McCrory may be on course to have a “Pence problem” in 2015.

In the days immediately following the mid-term elections, Gov. Pat McCrory insisted that – in spite of his party maintaining strong supermajority status in both houses of the General Assembly – North Carolina “is still very divided,” adding, “We’ve got to recognize where there’s differences and then try to have conversations.”

Among the conversations McCrory would like to have with the legislature is the topic of Medicaid reform and expansion. Expanding Medicaid into the states is a major component of Obamacare, but is something 23 states (including North Carolina) have refused to do.

McCrory has indicated that his preference is to first “fix” the state’s Medicaid program, which has been plagued with cost overruns of hundreds of millions of dollars over the past few years, and then he’d be open to considering expansion.

Most recently, however, the governor said he may consider following the model put forth by Indiana Gov. Mike Pence, which simultaneously alters the Medicaid system while expanding it.

Pence originally sold the plan as a “conservative” alternative to Medicaid expansion in order to maintain support from his political base. But conservative groups saw through the label and called Pence’s bluff.

The Foundation for Government Accountability (FGA), one of the nation’s premiere advocates for patient-centered health care reform, slammed Pence’s plan as “a massive new entitlement for childless adults.”

Indeed, a 2012 study by the Urban Institute examined the demographic makeup of the currently uninsured that would be newly eligible for Medicaid under Obamacare’s expansion. Nationally, about 4 of every 5 newly eligible for Medicaid would be a working age adult with no dependent children. In North Carolina, that figure is more than 3 of every 4.

Among the most relevant “reforms” included in Pence’s plan are: an expansion of eligibility to able-bodied, working age, childless adults earning up to 138 percent of the federal poverty level; robust Medicaid benefits mandated by Obamacare for enrollees – which limits the state’s flexibility for coverage options; and a form of health savings account for enrollees, almost completely financed by taxpayers.

Other wildly unpopular aspects to the Pence plan could really alienate McCrory’s base of support in 2015 and beyond if he were to follow suit.

First, Obamacare’s Medicaid expansion is paid for in large part by cutting more than $700 billion from seniors’ Medicare benefits, according to Congressional Budget Office estimates. That hits a sour note with voters.

Secondly, according to the Obama administration’s own Department of Justice, nearly 1 in 3 of those who become newly eligible for Obamacare’s Medicaid expansion would have had previous time served in prison or jail. Unsurprisingly, the thought of extending Medicaid to childless ex-cons at the risk of crowding out coverage for more needy families does not sit well with voters.

Lastly, we know that as the Medicaid budget grows, less money is left for other priorities, such as public education and public safety. Some refer to this as the “Pac-Man” effect, as Medicaid gobbles up money from other portions of the state budget.

The more voters learn about Medicaid expansion, the more they oppose it. Gov. McCrory would be wise to listen.

http://www.charlotteobserver.com/2014/11/23/5332858/medicaid-trap-awaits-mccrory.html#.VHMix4fO8ZY

November 24, 2014 at 9:11 am
Richard Bunce says:

Congress should eliminate the minimum income requirement from the ACA Marketplace tax credit/subsidy and for the CSR program and then eliminate Medicaid... this way State low income residents will have access to real healthcare insurance accepted by many providers and not substandard healthcare insurance accepted by increasingly fewer providers. In addition it will eliminate the nonsense of make a dollar more then they have to move to ACA Marketplace plan, make a dollar less then have have to move to Medicaid... only government could come up with such nonsense.