Expansion will pay for itself by reducing the number of uninsured adults and children across the state
RALEIGH (August 21, 2012) – The Medicaid expansion under the Affordable Care Act will extend insurance coverage to more than half a million North Carolinians, while also saving the state and its taxpayers billions of dollars, according to a new report.
With the implementation of health reform, the first year of the Medicaid expansion alone is expected to reduce the number of uninsured persons in North Carolina by 64 percent, said a new report from the Budget and Tax Center, a project of the North Carolina Justice Center, with the number moving from 1.3 million uninsured individuals in 2013 to 475,185 in 2014. Over 95 percent of new Medicaid enrollees under the expansion are expected to be previously uninsured, the report said.
Determining the cost of Medicaid expansion to North Carolina involves considering not only the direct costs of providing coverage, but also the money that would be saved from having fewer uninsured residents and an overall healthier population, the report said.
Under current law, hundreds of thousands of low-income working parents and adults aren’t eligible for coverage through North Carolina’s Medicaid program, as a full-time working parent earning minimum wage exceeds the income requirements for Medicaid eligibility and non-disabled adults without dependent children aren’t eligible at any income level. Under the expansion, however, parents in families at or below $25,400 in annual income for a family of three will qualify for health insurance, and low-income adults earning at or below 138 percent of the federal poverty limit (FPL) will also be eligible for Medicaid. Without the expansion, these low-income, working adults will continue to be cut off from access to health insurance, the report added.
The first year of the expansion will require the state to spend 2 percent more on the Medicaid program than was budgeted for FY2012-13 but will provide health coverage for almost half a million working adults and children, the report said, many of whom were previously uninsured. Across the country, people who will become eligible for Medicaid under the expansion are younger and healthier than the current population enrolled in Medicaid, meaning they will be less costly to insured through Medicaid.
In fact, cost savings from the reduction in uncompensated medical care in North Carolina is expected to reach between $1 and $2 billion from 2014-2019. As a result of the expansion, existing Medicaid payments that supported care for the uninsured can be reduced, the report said, and there will be less need to shift the cost of uncompensated care to private insurers and health care providers.
“Having roughly one in five Americans uninsured is a drain on the American workforce and the American economy,” said Brenna Burch, a policy analyst with the Budget and Tax Center and author of the report. “Implementing the Medicaid expansion quickly, effectively, and responsibly will not only improve the lives of hundreds of thousands of struggling North Carolinians through greater access to coordinated care – it will also save the state, and its taxpayers, a great deal of money.”
FOR MORE INFORMATION CONTACT: Brenna Burch, Policy Analyst, Brenna@ncjustice.org, 919.856.2176; Jeff Shaw, Director of Communications, firstname.lastname@example.org, 551.503.3615 (cell).