Relief proposal would offer NC a new and even sweeter deal on Medicaid expansion

At some point the federal government is going to make North Carolina Republicans an offer on Medicaid they simply can’t refuse. And when one takes a look at the latest proposal contained in the new COVID relief bill wending its way through the U.S. House, it’s hard to see how — short of literally stuffing cash into Phil Berger’s and Tim Moore’s pockets — the feds could be more, over-the-top generous.

As a hot-off-the-presses analysis from the fiscal policy wonks at the Center on Budget and Policy Priorities shows, the new proposal would be incredibly beneficial to North Carolina by pumping $2.4 billion new dollars into the state over just two years if it expanded Medicaid under the Affordable Care Act (see the table from the report below). This windfall would be on top of the net benefits the state would already realize under existing law through expansion.

This is from the CBPP report:

"The Energy and Commerce relief bill includes a two-year increase in federal Medicaid funding, beginning when a state implements the expansion, as an added incentive for states to newly expand Medicaid. The financial incentive to expand Medicaid is already substantial; the federal government covers 90 percent of the cost of coverage for the expansion group. This provision is meant to provide an added incentive to expand coverage at a time when expanding access to health care is particularly important. If the 14 remaining states expand, at least 4 million additional uninsured adults would become eligible for Medicaid coverage, likely more due to the recession. Of these, nearly 60 percent are people of color.

"In states considering the Medicaid expansion, officials sometimes cite state costs as a concern. While research shows that Medicaid expansion generates enough savings and increased revenue to offset the state’s share of the cost, the robust fiscal incentive in the House bill goes far to address any remaining cost-related concerns because it would increase overall Medicaid funding by more than the cost of covering the expansion group over the first two years

"The House bill would increase how much the federal government pays toward a state’s Medicaid expenditures (known as the “federal medical assistance percentage” or FMAP) for all groups other than those eligible through expansion by 5 percentage points for two years after a state expands. States would receive the 90 percent enhanced FMAP for the expansion group. The increased federal funds stemming from the overall increase in the FMAP for the rest of the Medicaid program would exceed the full cost of the Medicaid expansion, providing them with additional funds they could use to stave off cuts in Medicaid and in other state services during the economic crisis accompanying the pandemic."

And here’s the table listing the 14 non-expansion states:

 Source: Center on Budget and Policy Priorities

The bottom line: The ongoing Republican refusal to follow the lead of dozens of other states — states led by politicians of both major parties — is a massive and destructive policy error and, even more importantly, a true human tragedy that’s directly led to the unnecessary deaths of thousands of North Carolinians. One prays that this new proposal will swiftly become law and finally, at long last, convince North Carolina Republican leaders to end their utterly cruel and ignorant obstruction of this essential human service.