States Not Expanding Medicaid Will Leave Some Residents Without An Affordable Health Care Option

KFF: The Affordable Care Act Expected States To Expand Medicaid Thereby Giving Low-Income Individuals Access To Coverage. According to a Kaiser Family Foundation (KFF) issue brief, the Affordable Care Act (ACA) envisioned Medicaid expansion would cover uninsured individuals up to 138 percent of poverty and did not provide premium tax credits for those expected to be covered by Medicaid. The lack of expansion by some states has left some residents without affordable health coverage, resulting a coverage gap for these residents:

In most states that do not expand Medicaid, however, many people will be left without an affordable coverage option. Medicaid eligibility for adults in states not moving forward with the ACA Medicaid expansion is limited. As of January 2014, the median eligibility level for parents in states not moving forward will be just 47% of poverty, or about $9,200 a year for a family of three. Only four states not expanding Medicaid (Alaska, Maine, Tennessee, and Wisconsin) cover parents up to at least poverty, and eligibility limits in some states are less than 20% of the poverty level (16% in Alabama, 19% in Texas). Of the states not moving forward with the expansion, only Wisconsin will provide full Medicaid coverage to adults without dependent children in 2014.

The ACA envisioned people below 138% of poverty receiving Medicaid and thus does not provide premium tax credits for the lowest income. As a result, individuals below poverty are not eligible for Marketplace tax credits, even if Medicaid coverage is not available to them. Individuals with incomes above 100% of poverty in states that do not expand may be eligible to purchase subsidized coverage through the Marketplaces; however, only about a third of uninsured adults (3 million people) who could have been eligible for Medicaid if their state expanded fall into this income range. Thus, there will be a large gap in coverage for adults in states that do not expand Medicaid. [Kaiser Family Foundation, 10/23/14, internal citations removed]

Top NC Print Media Largely Fail To Report On Medicaid Coverage Gap

Top Three NC Newspapers Covered The Medicaid Coverage Gap In Only 8 Out Of 80 News Articles. According to a Media Matters analysis of news articles covering the Medicaid expansion debate in North Carolina's three largest papers by circulation (The Charlotte Observer, The Raleigh News & Observer, and the Winston-Salem Journal), since July 26, 2013 -- the end of the last legislative session -- there were only eight mentions of the Medicaid coverage gap out of 80 total articles mentioning Medicaid expansion, making up only 10 percent of expansion coverage.

KFF: 28 Percent Of Uninsured North Carolinians Fall Into The Coverage Gap. According to a report by the Kaiser Family Foundation, 318,710 North Carolinians -- or 28 percent of all uninsured nonelderly adults -- fall into the coverage gap. North Carolinians also comprise 7 percent of the national total of uninsured adults who could fall into the coverage gap:

[Kaiser Family Foundation, 10/23/13]

KFF: 54 Percent Of North Carolinians Who Fall Into Coverage Gap Are People Of Color. According to a study by the Kaiser Family Foundation, approximately 172,000 North Carolinians, or 53.96 percent of the total uninsured population falling into the coverage gap, are people of color. [Kaiser Family Foundation, 12/17/13]

Medicaid Expansion Would Improve Health Care Outcomes For Low-Income Individuals

KFF: “A Large Body Of Studies Over Several Decades ... Provides A Solid Empirical Foundation For The ACA Expansion Of Medicaid.” A Kaiser Family Foundation analysis of a “large body of studies over several decades” on the effectiveness of Medicaid found that the evidence in favor of expansion outweighs the programs imperfections, meaning those affected by the expansion “can be expected to benefit significantly”:

In its totality, the research on Medicaid shows that the Medicaid program, while not perfect, is highly effective. A large body of studies over several decades provides consistent, strong evidence that Medicaid coverage lowers financial barriers to access for low-income uninsured people and increases their likelihood of having a usual source of care, translating into increased use of preventive, primary, and other care, and improvement in some measures of health. Furthermore, despite the poorer health and the socioeconomic disadvantages of the low-income population it serves, Medicaid has been shown to meet demanding benchmarks on important measures of access, utilization, and quality of care. This evidence provides a solid empirical foundation for the ACA expansion of Medicaid eligibility to millions of currently uninsured adults, and individuals and communities affected by the Medicaid expansion can be expected to benefit significantly. [Kaiser Family Foundation, 8/2/13]

Harvard School Of Public Health: “Expanding Medicaid To Low-Income Adults Leads To Improved Health, Fewer Deaths.” A study from the Harvard School of Public Health which studied the expansion of Medicaid to childless adults in three states prior to the Affordable Care Act, found positive improvements in patient health, mortality rates, and access to care under the expansion (emphasis added):

“The recent Supreme Court decision on the Affordable Care Act ruled that states could decide whether or not they wanted to participate in the health care law's Medicaid expansion. Our study provides evidence suggesting that expanding Medicaid has a major positive effect on people's health,” said Benjamin Sommers, assistant professor of health policy and economics at HSPH and the study's lead author.

[...]

The HSPH researchers, including senior author Arnold Epstein, chair of the Department of Health Policy and Management, and Katherine Baicker, professor of health economics, analyzed data from three states--Arizona, Maine, and New York--that had expanded their Medicaid programs to childless adults (aged 20-64) between 2000 and 2005. They selected four neighboring states without major Medicaid expansions--New Hampshire (for Maine), Pennsylvania (for New York), and Nevada and New Mexico (for Arizona)--as controls. The researchers analyzed data from five years before and after each state's expansion.

The results showed that Medicaid expansions in three states were associated with a significant reduction in mortality of 6.1% compared with neighboring states that did not expand Medicaid, which corresponds to 2,840 deaths prevented per year for each 500,000 adults gaining Medicaid coverage. Mortality reductions were greatest among older adults, non-whites, and residents of poorer counties. Expansions also were associated with increased Medicaid coverage, decreased uninsurance, decreased rates of deferring care due to costs, and increased rates of “excellent” or “very good” self-reported health. [Harvard School of Public Health, 7/25/12]

Expanding Medicaid Would Significantly Benefit North Carolina's Economy

CBPP: Expanding Medicaid Will Increase State Spending On The Program By Less Than 8 Percent By 2022. According to the Center on Budget and Policy Priorities, spending associated with Medicaid expansion will cost the state 3.1 billion through 2022, just a 7.7 percent increase compared to spending on Medicaid without expansion. [Center on Budget and Policy Priorities, accessed 3/28/14]

The Commonwealth Fund: Rejecting Medicaid Expansion Will Result In A Net Loss Of Over $2.5 Billion In Federal Funds By 2022. According to a report by The Commonwealth Fund, as a result of not expanding Medicaid, North Carolina could lose a net $2,591 billion in Federal funding by 2022 by rejecting Medicaid expansion. [The Commonwealth Fund, December 2013]

NC Institute Of Medicine: New Tax Revenues From Expansion Would Save The State $65.4 Million By 2022. According to the North Carolina Institute of Medicine, savings offsets as a result of Medicaid expansion would save the state $65.4 million by 2022:

However, there are some offsets that reduce the amount of new state funding needed to cover the woodwork population. First, pharmaceutical companies pay the federal and state governments a drug rebate. In addition, Congress increased the [federal medical assistance percentage] rate for the Children's Health Insurance Program in federal fiscal years (FFY) 2016-2019. This reduces the total amount needed to support the Medicaid costs for the woodwork group. According to DMA, the total costs, including service and administrative costs, drug rebates, and the enhanced CHIP FMAP rate, will be approximately $106 million ($37.4 million to the state) in SFY 2014, growing to approximately$577.4 million ($202.8 million to the state) in SFY 2021.

[...]

Because of the high federal match rate, the offsets, and the new tax revenues, the state would likely experience a net savings of $65.4 million from the Medicaid expansion over the eight-year time period (SFY 2014-2021). On a yearly basis, the state would be expected to save a high of $124.2 million in SFY 2016. Beginning in SFY 2018, North Carolina would be required to contribute toward the costs of services to the newly eligibles. By, SFY 2021, the net new annual expenditure will be approximately $118.7 million. [North Carolina Institute of Medicine, accessed 3/31/14]

KFF: Medicaid Expansion Would Improve The Economy, Bring 23,000 New Jobs, And Increase Disposable Personal Income By $1 Billion In North Carolina. According to a report by the Kaiser Family Foundation, Medicaid expansion would help create 23,000 new jobs, increase the state's annual GDP by $1.4 billion, and increase real disposable personal income by $1 billion through 2022. [Kaiser Family Foundation, November 2013]

Rejecting Medicaid Expansion Will Strain Hospital Systems In North Carolina

KFF: Funding To Some North Carolina Hospitals Will Decline Under ACA. A report by the Kaiser Family Foundation explains how under the Affordable Care Act (ACA), federal funds to Disproportionate Share Hospitals -- facilities that care for a high number of uninsured patients -- will receive less federal compensation for care of the uninsured because the ACA assumed all states would use Medicaid expansion funds to provide coverage for these patients. [Kaiser Family Foundation, November 2013]

Congressional Research Service: Failing To Expand Medicaid Will Have A Negative Effect On Hospitals. According to the Congressional Research Service, the ACA reduction of Disproportionate Share Hospital payments will have a negative effect on hospitals in states that refuse to expand Medicaid:

Hospitals in states that are not expanding are concerned because the DSH allotments will be reduced by the same total national amount whether or not states implement the expansion. If a state implements the expansion, the uncompensated care for hospitals should decline along with the DSH allotments (though not proportionally). However, if a state chooses not to implement the expansion, the demand for uncompensated hospital care is expected to persist but the amount of Medicaid DSH payments hospitals receive to subsidize such care may be reduced.58 As a result, hospitals have been encouraging their states to implement the ACA Medicaid expansion in order to reduce the uncompensated care for hospitals. Even though Medicaid provider rates are generally lower than the rates paid by private insurance or Medicare, hospitals would rather receive payment from a Medicaid patient than have no payment from an uninsured patient. [Congressional Research Service, 12/2/13]

North Carolina Hospitals Have Already Considered Closing Without Medicaid Expansion. According to a report by Think Progress, Vidant Pungo Hospital in Belhaven North Carolina has considered closing due to reduced Disproportionate Share Hospital payments and a lack of Medicaid expansion. [Think Progress, 9/6/13]

Methodology

Media Matters searched for news articles on Nexis from North Carolina's top three highest-circulating newspapers: The Charlotte Observer, Raleigh News & Observer, and The Winston-Salem Journal. The search focused on the news coverage of Medicaid expansion and the “coverage gap” from July 26, 2013 (the last day of the 2013 legislative session) to March 31, 2014 using the search term "(medicaid w/10 expan!) OR (cover! W/10 gap)" to find all relevant articles mentioning either Medicaid expansion or the coverage gap. News articles were considered responsive if they specifically mentioned the coverage gap or described the people left uncovered because of the state's refusal to expand Medicaid.