On Medicaid, North Carolina should learn lessons from Louisiana - don't expand

Published September 5, 2019

By Donald Bryson

The ongoing impasse surrounding North Carolina’s budget has at its root Medicaid expansion—Gov. Roy Cooper supports it, while legislators have voiced concerns. Based on Louisiana’s experience during three years of Medicaid expansion, the General Assembly should maintain its skepticism.

If Medicaid expansion in North Carolina looks anything like expansion in Louisiana, residents can expect several consequences supporters won’t advertise, like skyrocketing enrollment and costs. While Louisiana officials initially claimed that only 306,000 individuals would sign up for Medicaid expansion, the rolls soon swelled to over 505,000 —a 65% increase over the original projections. This enrollment explosion not only increased costs but caused severe problems for Louisianans on the pre-expansion Medicaid rolls in getting access to care.

As a result of this skyrocketing enrollment, a Louisiana Medicaid program originally estimated to cost $1.2-$1.4 billion annually cost taxpayers over $3.1 billion in the last fiscal year. In this respect, Louisiana reflects a broader trend of higher-than-expected enrollment, and larger-than-expected costs, seen nationwide.

Enrollment swelled, and costs exploded, because of another unintended consequence of Medicaid expansion: People dropping their private health insurance to enroll in Medicaid. Public records requests of internal Louisiana Department of Health data show that thousands of people per month have moved from private coverage to the government rolls. Due to this shift, Louisiana taxpayers have spent hundreds of millions of dollars each year funding coverage for people who already had health insurance.

Louisiana residents have also seen their hard-earned taxpayer dollars funding Medicaid coverage for ineligible individuals. An evaluation by Louisiana’s legislative auditor led to the state finally removing more than 30,000 ineligible individuals from the Medicaid rolls — including 1,672 Medicaid recipients with six-figure incomes. With the Office of the State Auditor recently flagging problems in North Carolina’s eligibility systems, residents in the Tar Heel State could likewise end up paying for “free” coverage for affluent and ineligible individuals.

One thing North Carolina won’t see: Any supposed economic benefits from Medicaid expansion. While a study claims that expansion created 19,000 jobs in Louisiana, the facts suggest otherwise. Between June 2016 — the month before expansion took effect — and May 2019, the state has gained only 3,700 jobs. Louisiana’s anemic job growth of less than 0.2% over nearly three years, coupled with a net reduction in the labor force of almost 63,000 during the same time, prove Medicaid expansion anything but an economic boon.

Medicaid expansion also fails to help the most vulnerable in our society: The over 700,000 individuals with disabilities nationwide, including over 14,000 in North Carolina, still on waiting lists for Medicaid coverage of home-care needs. In Louisiana, more than 15,000 individuals with disabilities remain on state waiting lists — even as the state has expanded Medicaid coverage to the able-bodied. While ineligible adults with six-figure incomes have received Medicaid benefits in Louisiana, at least 5,534 individuals with disabilities have diedwhile waiting to access care since expansion took effect.

Supporters claim that, because the federal government pays for the majority of Medicaid expansion funding, opponents should not turn down matching funds from Washington. But that “free” money ultimately either comes out of the pockets of residents in North Carolina, Louisiana, and the other 48 states or adds to the jaw-dropping $22 trillion of federal debt.

Even “free” things normally come with costs — and so too with Medicaid expansion. In Louisiana, expansion has driven people off private coverage, and encouraged fraud and abuse, even while failing to deliver jobs or help society’s most vulnerable. For all these reasons and more, North Carolina should turn down Obamacare’s expansion of Medicaid to the able-bodied.

Daniel Erspamer is CEO of the Pelican Institute, a nonpartisan think tank based in New Orleans, LA. Donald Bryson is president and CEO of the Civitas Institute, a nonpartisan think tank based in Raleigh.
This article originally appeared in the Greensboro News-Record on August 19, 2019.