Medicaid Expansion is a Losing Shell Game

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It’s 2021. We don’t replace keys on typewriters anymore. We don’t let our friends dance to disco. And states shouldn’t expand Medicaid to able-bodied adults under Obamacare. 

After ten years of expansion, advocates breaking promises and shattering projections, we should all understand the shell game that is Obamacare.

The Left’s outdated arguments have collided with the reality of busted budgets and longer waiting lists for the truly needy in state after state.

But three big recent changes at the federal level mean there’s no hiding the truth anymore.

First, when Congress passed and President Biden signed the American Rescue Plan earlier this year, they took one of the loudest arguments for expansion off the table.

North Carolina, a state currently weighing Medicaid expansion, is a powerful illustration. North Carolinians with incomes between 100 to 150 percent of the federal poverty level now qualify for Silver-level private plans, which are entirely free to them and entirely funded by the federal government.

But expanding Medicaid would make it illegal for the expansion population to keep those private plans.

Let’s read the subtext out loud: Expansion will shift resources away from the truly needy toward able-bodied adults while, at the same time, shifting able-bodied adults from their private coverage into government dependency.

Who ever said shell games had to be fair?

Second, it’s clear that the era of flexibility in state Medicaid programs is over. Think expansion makes sense with a work requirement for able-bodied adults? Too bad — the Biden administration will not approve such requirements.

Under this administration, North Carolina’s choices are limited. Does the state want its Medicaid program to look more like New York and California’s or more like Florida’s and Tennessee’s?

Before answering, bear in mind that expansion states have seen waiting lists for the truly needy grow as states enroll more than twice as many able-bodied adults as projected, most of whom already had private coverage.  

And third, federal unemployment policy continues to drive a growing crisis in the American economy. The “help wanted” signs and bonus offers taped to storefront windows across North Carolina advertise our labor market shortage more effectively than any dry economic data.

So what? Expanding welfare to more able-bodied adults in the middle of a labor shortage is like emptying your savings account to pay an auto mechanic to slash your tires before a big summer road trip. 

Economists might laugh. Business owners might shake their heads. But policymakers in Florida, Tennessee, and South Carolina will smile ear to ear at their new competitive advantage over North Carolina.

Remember: layered underneath these three developments sits a provision of federal law from last year which makes it illegal for North Carolina to remove anyone from Medicaid after they enroll.

During the public health emergency, which the Biden administration shows no signs of ending soon, North Carolina taxpayers must continue to fund every enrollee’s coverage even if he or she becomes ineligible or commits fraud.

Even without these federal changes, Medicaid expansion would still have increased costs, deepened dependency, and corroded our American culture in which a person’s ability to acquire goods is tied to that person’s willingness to work.

But if North Carolina decides to expand Medicaid now, it will be buying outdated arguments for a raw deal. And there’s no going back.

It would be cheaper for North Carolina to bring progressive activists up to speed with reality through a few fresh newspaper subscriptions. Just listen to the truly needy and policymakers in states which have expanded Medicaid to able-bodied adults. 

They’ll tell you: Medicaid expansion is old — and bad — news. 

Scott Centorino is a senior fellow at the Foundation for Government Accountability.



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