The new battle lines over Medicaid expansion
The new battle lines over Medicaid expansion
Sen. Berger favors Medicaid expansion because the landscape has changed. But reasons for opposition have changed, too.
Medicaid expansion will again be a major political fight in 2023, but the battle lines have shifted significantly. For years, the issue pitted Democrat Gov. Roy Cooper in favor of expanding the government insurance program, with a conservative majority in the General Assembly against it.
Now, Senate President Pro Tem Phil Berger is an advocate of expanding Medicaid, though the Republican caucus still isn’t convinced, particularly in the state House.
But more has shifted than just the politicians. The state of health insurance has changed a lot, too — and a major argument for expanding Medicaid has already quietly been taken off the table. Here’s the latest lay of the land.
A brief overview of Medicaid in North Carolina
Some 2.75 million North Carolinians are currently enrolled in Medicaid, the federal health insurance program that pays healthcare costs for many categories of low-income people. This number has roughly doubled over the past decade. Under Medicaid, the federal government pays two-thirds of the costs of care in North Carolina, while the state government picks up the other third.
To qualify for Medicaid, you must fall within income limits — somewhere between 100% and 200% of the federal poverty level — and also be one of the following:
A child
A parent or guardian of a child under age 18
Pregnant
Disabled, or the family member of a disabled person
Blind
Elderly
There are no premiums or deductibles, but there are $4 copays for many services.
If North Carolina expanded Medicaid, people could become eligible for coverage based strictly on their income. Under Medicaid expansion, everyone with income under 138% of the federal poverty level becomes eligible.
This site from the federal government is a great way to see the subsidized health insurance options for different income levels and family sizes.
Why Sen. Phil Berger now supports Medicaid expansion
The Senate President Pro Tem hasn’t been overly vocal about why he has switched his position on expanding Medicaid. However, after noting this in last week’s newsletter, his staff helpfully pointed me to an in-depth podcast interview he did with Spectrum News’s Tim Boyum in June on the subject.
For nearly a decade, Berger stood staunchly against expanding Medicaid, a key component of the Obama-era Affordable Care Act. The program promised to pay 90% of the costs if states opted to open up Medicaid to more people and bear 10% of the costs.
He was against Medicaid expansion, he told Boyum, for three reasons:
Philosophy. Berger was philosophically opposed to increasing government dependence and growing the size of a social welfare program.
Cost. Berger was concerned that the government wouldn’t hold up its end of the 90/10 bargain, ultimately pushing more costs on state governments.
Structure. North Carolina’s Medicaid system was fundamentally broken, frequently running over on costs.
The latter two concerns have been relieved over the past decade, Berger said. Both Republicans and Democrats have controlled the White House and Congress with no change to the Medicaid cost structure. “They ain't going to do nothing in Washington, is the short answer,” Berger said. At the same time, the state’s 10% portion could be covered by a tax on hospitals, which could then get reimbursed by the federal government. “It's crazy on the part of the federal government, Berger said, “but our responsibility is the state budget.”
And North Carolina has recently completed a restructuring of Medicaid — known as “Medicaid transformation” — that has stabilized the state’s ability to budget for its expenses. Instead of paying healthcare providers for every individual service, the state now pays a certain amount per person enrolled in Medicaid to a private company that administers payments to providers.
In the interview, Berger didn’t say directly whether his philosophy had changed. But said that most people he expected Medicaid expansion to help would be working people without many good options.
“We will be covering folks that really are falling through the cracks in terms of health insurance coverage,” he said. He described the scenario of a single mom with two children working full-time and earning $30,000 per year. Her children may be covered by Medicaid, but she would not because she earns too much. But she wouldn’t be eligible for subsidies on private insurance through the federal marketplace, Berger said.
It’s the classic “coverage gap” argument proponents of Medicaid expansion have used for years. “It is slam-dunk the right thing to do at this time, and it’s not even close,” Berger said.
New reasons to oppose Medicaid expansion
However, marketplace subsidies have changed, too. Two years ago, Berger would have been correct. Now, the woman in Berger’s hypothetical would have access to free or nearly free private insurance without needing Medicaid.
As part of the American Rescue Plan, people earning between 100% and 150% of the federal poverty level can now qualify for $0 premium “Silver plan” private insurance. While not as generous as Medicaid, these plans do have very low deductibles and out-of-pocket maximums.
If North Carolina were to expand Medicaid, some 320,000 people on private insurance through the marketplace would be forced off those plans and onto the government program, said Sam Adolphsen, policy director at the Foundation for Government Accountability, on Rep. Jeff McNeely's radio show in Iredell County this week.
In reality, the only people currently with no subsidies without Medicaid expansion are able-bodied, single adults earning less than about $13,000 per year. Presumably, this would primarily entail people who can work but choose not to.
North Carolina’s more pressing healthcare needs
North Carolina already doesn’t have enough medical providers to care for people with health insurance today, and expanding Medicaid without addressing this issue could create a true catastrophe.
Berger’s proposal to repeal Certificate of Need laws and allow highly trained nurses to practice more independently could help significantly. The General Assembly should move forward on these initiatives immediately, independent of Medicaid expansion. North Carolina should also do more to require transparency in healthcare prices and continue to encourage direct primary care.
Overall, North Carolina should focus on health care, not health insurance. But unfortunately, there’s only so much a state can do. The country’s healthcare system is heavily regulated at the federal level, and it will take Congressional action to fix it completely.
4 things of note
Treasurer Dale Folwell criticizes “woke” investing
A week after Florida made headlines by taking $2 billion in state pension fund assets away from BlackRock over the firm’s liberal policies on investments, State Treasurer Dale Folwell has called for BlackRock’s CEO to resign.
At issue is BlackRock’s focus on Environmental, Social and Corporate Governance (ESG) policies. This involves money managers using their shareholder votes to push companies to pursue climate-related and social justice initiatives rather than purely financial goals.
“BlackRock needs to be totally focused on returns for their clients, not on the political effort to ‘transform’ the economy,” Folwell said in a statement.
However, he stopped short of saying North Carolina would pull investments from the firm, as Florida has done. The state has roughly $14 billion managed by BlackRock.
Moore v. Harper goes before the Supreme Court
North Carolina's latest redistricting case was heard by the United States Supreme Court on Wednesday, and the media predictably went wild, claiming that the case could destroy the country.
Gov. Roy Cooper wrote a breathless editorial for The New York Times claiming that the ruling could destroy our "fragile democracy," full of words like "extreme," "diabolical," and "shocking." Don't take the bait. In an interview with the North State Journal, House Speaker Tim Moore accurately criticized this sort of approach.
“I think it shows the fact that they don’t really have a legitimate legal argument against the issue,” he told the newspaper. “So if you don’t have a valid argument, you just go in and start creating these crazy hypothetical scenarios that aren’t even applicable and try to argue about that. It’s the traditional bait-and-switch.”
I didn't listen to the oral arguments this time, but Dallas Woodhouse has a good write-up on the Carolina Journal site about them. It appears that the result I predicted may come to pass — a middle-of-the-road decision that declares that the North Carolina Supreme Court overstepped its authority in this case, but falls way short of telling state legislatures around the country that they have sole reign over redistricting.
Josh Dobson won't run for re-election as Labor Commissioner
North Carolina will have a new Elevator King or Queen after 2024. Labor Commissioner Josh Dobson announced this week at a Council of State meeting that he will not run for re-election to the position, which he won in 2020. Dobson indicated he will not seek any other office.
Dobson took over for Republican Cherie Berry, who won five terms as Commissioner of Labor beginning in 2000. During that time, she began the practice of putting the commissioner's photo inside every elevator inspected by the state.
I'll be honest, I do not have a power ranking of potential candidates for this race in 2024. If you've heard of anybody considering running, let me know. It's generally a good office for a state House or Senate member with experience working with the business community and strong administrative capacities. The role is not a stepping stone of any sort, but it is a member of the Council of State and an honorable way to serve North Carolina. The office also does have significant power in regulating workplaces across the state.
Gov. Cooper calls for more robust infrastructure security
Moore County spent the better part of last week in the dark after someone reportedly shot up two electrical substations, disabling the power for about 45,000 people. It's an extremely bizarre situation, and there have been very few details revealed. We don't know who did it, or why. Pretty much all we know is that whoever did it had to know what they were doing, according to Moore County Sheriff Ronnie Fields. Duke Energy said there was security in place at the facility, and all of the company's protocols were followed.
Apparently, a substation in Jones County was also damaged in November. A federal law enforcement memo this week said the power grid in Oregon and Washington was also attacked, with the aim "to cause widespread power failures with the potential impact of social disruption and violent anti-government criminal activity."
This situation is a valuable lesson in how fragile our state's critical infrastructure can be. Gov. Roy Cooper said at a news conference that the state would work with utility companies to "harden our infrastructure where that’s necessary," according to WFAE — but if we don't know how in the world this happened, this approach is unlikely to bear fruit.