Bad bill of the week: SB 730 - Medicaid expansion

by Brian Balfour, Civitas Institute, June 2, 2014.

This week’s bad bill would subject half a million North Carolinians to an already overcrowded Medicaid system and strain its already skyrocketing and bloated budget. Senate Bill 730, sponsored by Sens. Ben Clark (D-Cumberland) and Gladys Robinson (D-Guilford), would expand the eligibility guidelines for North Carolina’s Medicaid program to 133% of federal poverty guidelines, as laid out in Obamacare. (There is also a House bill equivalent, HB 1083).

The goal of expanding Medicaid to hundreds of thousands of more NC citizens is sold as a compassionate way to provide access to medical care for low-income families. However, reality shows that this act would in fact be rather cruel and not compassionate.

For starters, being enrolled in Medicaid does not ensure quality health outcomes nor does it even ensure access to care. As pointed out in this article, “Any discussion of Medicaid should begin with its track record on patient health. On that score, Medicaid is an abject failure.”

As a recent ground-breaking study in Oregon showed, Medicaid enrollees don’t experience any better health outcomes than the uninsured, and often times experience even worse outcomes.

Research also shows that Medicaid patients – especially children – have far longer wait times to see a doctor or specialist and are more likely to be turned away for treatment by physicians. Trouble finding a regular physician leads Medicaid patients to utilize the highly expensive emergency room for non-emergent care at a higher rate than the uninsured.

Indeed, here in North Carolina, during a time when the Medicaid program expanded by 600,000 people, the number of physicians accepting Medicaid patients dropped by 11 percent. The Medicaid program is already overcrowded; who would the additional 500,000 patients under Medicaid expansion see when they are sick?

Lastly, there is the matter of cost. North Carolina’s Medicaid costs have exploded by 42 percent in the last decade, and per-patient costs of coverage are rising at nearly as high a pace. While the federal government has previously promised to cover most of the cost of the new Medicaid patients initially, the expansion will still be very costly to the state. A fiscal note attached to SB 730estimates that more than half a million people would be added to the Medicaid rolls, at a cost to the state of more than $660 million over the next seven years. This estimate is likely very low for a couple of reasons.

First, they project the per-patient cost of Medicaid coverage to increase at only about four percent each year. Given the rapidly rising cost of medical care and the tendency for Medicaid patients to rely more heavily on expensive ER care, this is likely a low estimate. This Kaiser Family Foundation report shows North Carolina’s Medicaid costs rising at 6.1 percent in recent years. Costs could quickly escalate to more than $1 billion.

Furthermore, there is no guarantee the federal government will cover its ends of the costs as promised. The feds’ portion of covering the new enrollees is estimated to exceed $16 billion over the next seven years in North Carolina alone. With the federal government still running near-trillion dollar deficits, one must question the wisdom of relying on federal funds for years to come. Indeed, the White House has already been backing off their original promise to cover 90 percent of the added Medicaid expenses. Even a small drop in federal support could impose substantial financial pressure on the state budget.

In sum, expanding Medicaid would not help the health outcomes of new enrollees, would sentence those enrollees to a broken and already overcrowded system with limited access to care, and end up costing North Carolina taxpayers billions of dollars. For these reasons, SB 730 is the week’s Bad Bill of the Week.

http://www.nccivitas.org/2014/bad-bill-week-sb-730-medicaid-expansion/