By Matthew Langston and Molly Weisner
Dan McCready, the Democratic candidate in the special election for North Carolina’s 9th Congressional District, made a Facebook post on July 10 expressing his support for Medicaid expansion.
He made several claims about the costs and potential benefits of expansion.
Before discussing McCready’s claims, it is important to understand what Medicaid is, as well as the issue of expansion.
Medicaid is a program funded jointly by the states and the federal government that provides health coverage for more than 65 million Americans, according to an enrollment report from April 2019. Eligibility can vary by state, but the program covers people such as low-income adults, children, pregnant women, seniors and people with disabilities.
Eligibility for the program was greatly expanded in 2010 by the Affordable Care Act, which is where the issue of Medicaid expansion arises.
A central provision of the law was its expansion of Medicaid eligibility to adults with incomes up to 138 percent of the federal poverty level.The law originally required states to accept this expansion, which the federal government would mostly pay for, or lose all Medicaid funding, but the Supreme Court ruled in 2012 that this provision was “unconstitutionally coercive” and struck it down.
After the Supreme Court ruling, the expanded eligibility provision went from being mandatory to optional for the states.
A total of 33 states and Washington, D.C., have since adopted Medicaid expansion under the law.
In 2018, voters in three states also approved ballot initiatives to adopt Medicaid expansion, but those states’ legislatures have not yet implemented expansion.
Of the 14 states that have not expanded Medicaid, most of them are in the South and all have Republican-controlled state legislatures.
Source: Kaiser Family Foundation’s interactive map on Medicaid expansion
North Carolina is one of those 14 states, and many, though not all, Republicans in the state legislature have expressed opposition to Medicaid expansion over concerns like expansion’s potential costs and what would happen if the federal government cut its spending on expansion.
Leighton Ku, director of the George Washington University’s Center for Health and Policy Research, said that the challenges to Medicaid expansion are mostly political.
Ku said that especially for the South, where Republicans control the state legislatures, the hesitation to expand Medicaid comes from fear of also expanding the federal government.
Ku also said that because Medicaid expansion came under the Affordable Care Act, there are political misgivings about it being tied to former President Barack Obama and the Democratic Party.
“It used to be one of these things that is just sort of an ideological divide,” Ku said.
But Medicaid expansion hasn’t been limited to Democratic-leaning states, as Republican-leaning states like Kentucky, Indiana, Louisiana, Alaska and more have adopted Medicaid expansion under the Affordable Care Act.
With this background information noted, let’s examine McCready’s claims on Medicaid expansion.
The first claim McCready makes is that “the federal government will pay 90% of the cost for a program that will bring jobs and federal money to our state.”
This claim is accurate, as the Affordable Care Act does say the federal government will pay for 90 percent of the costs associated with expansion starting in 2020 and continuing at that rate from 2020 onwards.
McCready also cites “the latest study” in his post, which reflects figures from a report by George Washington University on the benefits of Medicaid expansion in North Carolina.
Based on that report, McCready’s numbers are generally accurate. The report projected that an additional 630,000 North Carolinians would be covered by Medicaid by 2022, with that growth then stabilizing.
Expanding Medicaid, as McCready and the report say, would add nearly 37,000 jobs by 2022. The report says these new jobs would not be limited to the healthcare field, but would also be created in industries like construction and retail.
Federal funding to the state for Medicaid would also grow by just under $12 billion by 2022, as McCready claimed in his Facebook post.
Like McCready claimed, expanding Medicaid would help reduce the risk of rural hospitals closing. That’s noteworthy since six rural hospitals in North Carolina closed between 2014 and May 2019.
Ku, who also helped author the study, said it is harder for rural hospitals to maintain business because they are smaller, so Medicaid expansion would take some pressure off of hospitals by reducing uncompensated care.
When going by the recent George Washington University report on the potential effects of Medicaid expansion in North Carolina, McCready’s claims on the issue all seem to be accurate.
As for McCready’s jab at state Sen. Dan Bishop, his Republican opponent, for “taking some of the only votes against bipartisan bills” related to drug prices, that is largely accurate and is an issue UNC FactCheck has previously explored.
Bishop has also previously said he opposes Medicaid expansion for several reasons.
In a March press conference for the Health Care Expansion Act of 2019, a bill of which Bishop was a primary sponsor, he claimed costs were two to four times higher than expected for states that did expand Medicaid and caused budget cutbacks in other areas.
He also expressed doubt that the federal government would continue to cover 90 percent of the costs for expansion and said expansion would increase the national debt.
Most studies have found that costs were not substantially higher than expected for states that chose to expand Medicaid, though some states have enrolled more people than initially expected.
One analysis found that Medicaid expansion did not result in any significant increases in state spending or any significant cuts other programs.
A report by the National Association of State Budget Officers found that in about half of the states that expanded Medicaid, expansion actually reduced state spending by offsetting costs in other related policy areas.
It is worth noting that states’ Medicaid expansion costs will likely rise as the federal government reduces its contributions to 90 percent in 2020. These increases are expected to be modest, but expansion states have turned to various funding sources and requirements to cover these costs.
The federal government’s continuing payment of 90 percent of Medicaid expansion costs can only be undone or reduced by law. Reductions in federal Medicaid funding to expansion states were part of unsuccessful Republican-led attempts in 2017 at health care reform. If the federal contribution rate was reduced from 90 percent, many states have provisions in place that allow them to pull out of Medicaid expansion.
The subject of Medicaid expansion’s impact on the national debt has not really been researched, so it is difficult to say if Bishop is right on the subject. Still, one way of checking Bishop’s claim is to look at the federal budget.
For the 2017 fiscal year, the federal government spent $4.1 trillion and took in $3.3 trillion in revenue, resulting in a budget deficit of about $800 billion. The Treasury Department has to borrow from investors to cover any budget deficits, contributing to the national debt that is currently over $22 trillion.
The federal government spent $375 billion, or 9 percent of the budget, on Medicaid overall, but it’s unclear how much was spent specifically on Medicaid expansion.
Therefore, Medicaid is likely contributing to the national debt – but even if all Medicaid spending was cut, the federal government would still have a budget deficit that increases the national debt.
