Medicaid Expansion: Good Intentions, Terrible Costs

January 29, 2019

Bill filing period is here at the NCGA, and with it some of the standard fulfilling-campaign-promises filings. No surprise that our friends on the left immediately got to work expanding government.

NC Senate Democrats Twitter

And yesterday, first term Senator Wiley Nickel tweeted:

Sen. Wiley Nickel Twitter

That sound you’re hearing is the now Daily Mantra of Liberals.

“Conservatives!  Hail Ohio’s Medicaid Expansion.  Beware Kansas’s Tax Cuts.”

But is the new religious mantra of the left delivering salvation?

Widely reported by left-leaning outlets and blogs like Vox, the Ohio Department of Medicaid released a study claiming the expansion had been a rousing success yet neglected to note that no methodology was released with the study. A study with little to no explanation of how it arrived at such conclusions is hardly of use for anyone, save partisans who already have a preferred conclusion in mind.

Medicaid Expansionistas like to point to what they claim are low costs, however these initial projected costs are routinely significantly lower than actual spending levels. A key selling point for Gov. Kasich’s misbegotten Ohio expansion was that it would cost $13 billion from 2013-2020, yet by 2017 costs had already hit $19 billion, with the share every year increasing.

Our neighbors to the north in Virginia have also experienced some of the sticker shock that comes from the actual costs of Medicaid, with expected costs of their reforms off by nearly half a billion dollars.

Expansionistas will still lean on their same, tired talking point that the federal government picks up the bulk of the tab to start out. As Ray Nothstine points out:

But even the Republican champion of Medicaid expansion, former Ohio Gov. John Kasich, admits this 90 percent deal will change. In a 2017 op-ed in the New York Times Kasich noted, “And states cannot expect the federal government to continue paying 90 percent of Medicaid expansion costs given our nation’s historic debt; they must accept a gradual return to traditional cost-sharing levels.” And what are those traditional cost sharing levels for states? According to the left-leaning Center on Budget and Policy Priorities, that traditional cost-sharing averages out to around 40 percent, not 10 percent, painting a bleak future as state budgets become entirely swallowed up by Medicaid.

Expanding medical access and increasing affordability of healthcare is a good and noble cause, and we should continue to seek answers to ease the financial burden on North Carolinians. However, like paying for an expensive night out on a credit card, it may feel good and cathartic in the moment to expand Medicaid, yet all it accomplishes is delaying the day we pay the bill, and at an increasingly higher cost.

General Assembly leadership of the 2000s spent tomorrow’s money today, and when the bill came due they were caught unprepared. With billions in debt to the federal government and education spending slashed in response, leadership was rightfully swept out of power.

Our current leadership at the NCGA has routinely stared down politically easy and convenient options, and instead stuck true to conservative values of prudent spending, rightsizing government, and carefully balancing costs of programs. To expand Medicaid now would be a betrayal of the values that have served our state well the last several years and would leave us a bill we cannot afford to pay tomorrow, let alone today.