Medicaid Expansion Mythbusters

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Last year, United Way passed a resolution at our May board meeting supporting Medicaid Expansion in North Carolina. Since then, a lot of conflicting information has made its way to the public. The WNC Medicaid Expansion Advocacy Group addresses common myths below.

Myth #1: North Carolina cannot afford Medicaid Expansion.

Truth: Expanding Medicaid will save North Carolina money and keep tax dollars in North Carolina. Medicaid expansion saves state tax dollars spent on the uninsured. It reduces ER costs, uncompensated care costs for hospitals, and state spending on the uninsured. When the uninsured receive care, their costs are paid by the privately insured.
Source: Utah Health Policy Project

Myth #2: Medicaid is a broken program. Medicaid does not reduce uncompensated care costs nor produce better health outcomes.

Truth: Medicaid produces better outcomes for the money than any major private insurer. Medicaid reduces the proportion of hospital costs for procedures that go uncompensated, because Medicaid is a guarantee of payment for procedures covered in a given state. Medicaid has been shown to be more efficient than private health insurance.

The Utah Health Policy Projects notes research that Medicaid delivers life-saving preventative care and improves overall public health. In states that have already expanded Medicaid, mortality rates have been reduced significantly. Adults also experienced significant reductions in delays getting health care due to cost.
Sources: Center on Budget & Policy Priorities, Utah Health Policy Project


Myth #3: Medicaid Expansion will be a drag on the state’s economy. It will discourage people from work.

Truth: Expansion of Medicaid will pump billions of dollars into the state. That money will create a lot of employment, and while, some of the jobs created will be from government, that still means employment for real people who have families to support. The greatest discouragement from work that an individual can experience is chronically poor health. Studies show that illness results in nearly $300 billion in annual productivity losses among the employed population alone, with many of the chronically unemployed out of work as a result of illness and lack of access to treatment options. Medicaid expansion could have a tremendous positive impact on worker productivity and employment as well as an increase in average employer revenue. 

The Center on Budget & Policy Studies notes that the CBO (Congressional Budget Office) predicts that states will spend just 2.3 percent more on Medicaid with the expansion than they would have without health reform, and this 2.3 percent figure overstates the net impact on state budgets. It doesn’t reflect the large savings that states and localities will realize in health care spending for the uninsured. The Urban Institute estimates that states will save between $26 and $52 billion in this area from 2014 through 2019. The Lewin Group estimates the state and local savings at $101 billion.
Sources: National Institute of Health, Center on Budget & Policy Priorities

Myth #4: Medicaid Expansion sabotages private insurers.

Truth: Medicaid Expansion does not affect a market that private insurers have much to do with. The Expansion covers those citizens that subsist at an income level under 133 percent of the Federal Poverty Line (FPL). A Kaiser Family Foundation study in 2011 revealed that North Carolinians living at an income level under 139 percent of the FPL are insured overwhelmingly by Medicaid (45 percent) or through their employer (14 percent). Five percent subscribe to individual insurance of some kind, 3 percent receive some other form of public insurance, and a whopping 33 percent have no insurance. The private insurance market does not have much of an interest in this income bracket, regardless of whether the state expands Medicaid or not.
Source: Kaiser Family Foundation

Myth #5: Medicaid is a “one size fits all” program that can not adapt to the particular needs of a state.

Truth: Some claim that Medicaid is a rigid, “one-size-fits-all” program and that policymakers need to block-grant it and make other radical changes to give states meaningful control over their Medicaid programs. In reality, Medicaid already provides states with significant flexibility to design their own programs — whom they cover, what benefits they provide, and how they deliver health care services. The federal government sets minimum standards — certain “mandatory” populations that every state must cover and benefits it must provide — but beyond that, states are free to set their own rules.
Source: Center on Budget & Policy Priorities

Myth #6: Medicaid is a welfare system for people who don’t work.

Truth: Sixty-five percent of Medicaid recipients come from working families. Medicaid was separated from the welfare system in 1996. Low-income workers are at the greatest risk of being uninsured because their incomes are often too high for Medicaid, but too low for private coverage. 
Source: Utah Health Policy Project

Below: Dr. Olsen Huff, a consultant to the Mission Health Foundation and a retired pediatrician, explains the importance of Medicaid Expansion to United Way staff.

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