If North Carolina were to expand Medicaid coverage, savings and revenue would likely offset the cost to state taxpayers, a recent study from the Robert Wood Johnson Foundation indicates.
North and South Carolina are among 22 states that have refused to accept federal money to extend Medicaid to able-bodied, low-income adults as part of the Affordable Care Act. Although the federal government pays 100 percent of the cost for expansion through 2016 and at least 90 percent after that, some state leaders have balked at the additional state cost, which is estimated at just over $3 billion for North Carolina over 10 years.
The foundation, working with Manatt Health Solutions, studied the first year’s results from eight states that did expand Medicaid – Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington and West Virginia – and found gains ranging from $4 million in West Virginia to $204 million in Michigan. The numbers are expected to rise in 2015.
Deborah Bachrach, a partner at Manatt, outlined some of the areas where North Carolina could expect to benefit from expansion:
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▪ Some people who are now receiving mental health and substance abuse services paid for by the state would qualify for Medicaid, shifting the costs to the federal government.
▪ Some prisoners would have their hospital bills covered by Medicaid if they qualified under the expansion.
▪ Under the current system, the state picks up 34 percent of the tab for people with disabilities and pregnant women who get Medicaid coverage. Under expansion, Bachrach said, some of those people would be covered with the federal government picking up the full tab.
Bachrach said the foundation and Manatt released the study now in part because they want legislators in non-expansion states to see the numbers. But it’s far from clear whether the report will sway anyone in North Carolina’s state legislature. So far there’s been no talk of expansion, with Medicaid reform bills introduced this year focusing on new ways to control costs for the existing client base.