Will North Carolina soon make a generational mistake? After avoiding ObamaCare’s Medicaid expansion for a decade, some Republican lawmakers are considering a deal with Democratic
Gov. Roy Cooper
that would accept the program in exchange for extra spending and tax cuts. They should think twice before trading short-term priorities for long-term fiscal pain and even worse healthcare for the state’s most vulnerable residents.
The situation is moving quickly. On Oct. 9, Sen. Phil Berger, the highest-ranking Republican in the North Carolina Senate, publicly said he’s “open to discussion” on Medicaid expansion after years of opposing the policy. The change of heart follows back-room negotiations with Mr. Cooper and Republican House Speaker
about passing a state budget, which hasn’t happened since 2017.
Medicaid expansion has long been the sticking point. Four years ago, the Republican-controlled General Assembly passed a two-year budget over the newly elected governor’s veto. When the budget expired in 2019, Republicans no longer had a veto-proof majority, and the governor refused to sign a budget without Medicaid expansion. The state has functioned under the previous budget levels ever since, which Republicans have supported on grounds of fiscal conservatism and protecting North Carolinians from Medicaid expansion’s well-known flaws.
But now many Republicans want a budget for two reasons. First, the state has raked in billions of dollars in additional tax revenue during the pandemic. Second, federal relief bills have provided billions more for North Carolina to spend. Senate Republicans in particular see a chance to increase some spending while simultaneously passing corporate and income tax cuts. It seems that Mr. Cooper is willing to sign these measures if he gets Medicaid expansion in return.
Some state lawmakers appear resigned to a deal’s passage. Many think North Carolina should act before Democrats in Congress force Medicaid expansion on the state through some version of President Biden’s $3.5 trillion spending bill. Yet there’s far from a guarantee that any federal bill will pass, and in any case there’s no good reason to give in to one of the most foolish federal policies in recent memory.
After more than a decade of ObamaCare, Medicaid expansion has been an unmitigated disaster. State after state has blown past its expected spending following expansion, many by hundreds of millions or even billions of dollars. A big part of the reason is that states have enrolled roughly twice as many people in Medicaid as they initially expected. And as sign-ups surged, ObamaCare’s 100% federal funding began to fade, squeezing states with higher costs from both directions.
Lawmakers looking to balance budgets naturally will think to increase taxes. Spending cuts are another obvious solution, whether to education, infrastructure, public safety—or even specific Medicaid services and benefits, like vision and dental coverage. Before the pandemic, states like New York were considering cuts to the program, and once the pandemic hit, several states did cut Medicaid spending to keep their budgets balanced. Absent Medicaid expansion, they would have been better able to afford their obligations—especially to the people Medicaid is supposed to help.
That’s the biggest problem of all. Medicaid is designed for low-income families, but Medicaid expansion brings able-bodied working-age adults into the program. Our research shows that nearly 40% of those who would be covered in North Carolina already have signed up for or have access to free federally funded private health insurance through premium tax credits—coverage they would lose if expansion passed. Tens of thousands more already have insurance through their employers, which they could also lose if employers dump coverage in favor of Medicaid. They’d be shunted into a system that is notorious for long wait lists and poor health outcomes.
If expansion passes, the most vulnerable would suffer. More than 20,000 truly needy Americans have already died on wait lists since expansion began, according to our research. They were almost certainly pushed further back in line by the millions of able-bodied adults who joined the rolls. In the name of helping some people, many if not most of whom can work and get private coverage, Medicaid expansion hurts the people who actually need help.
Hope in North Carolina can be found in the House, where opposition to expansion runs high. It’s a reversal from the recent past, when the Senate tended to stand strongest. This week, Speaker Moore said expansion isn’t in the latest budget offer the legislature sent to the governor, though negotiations continue. After 10 years of principled leadership, North Carolina shouldn’t fold and accept one of ObamaCare’s signature policies. The Tar Heel State should kick Medicaid expansion to the curb once again.
Mr. Bragdon is president and CEO of the Foundation for Government Accountability, where Mr. Centorino is a senior fellow.
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