FOR IMMEDIATE RELEASE
October 1, 2020
CONTACT:
Jana Plat
jplat@businessfwd.org
(202) 861-1270
Washington, D.C. — Today, Business Forward issued a report explaining how layoffs caused by COVID-19 will worsen the “Medicaid gap” crisis in North Carolina – one of the 12 states that refuses to expand Medicaid to cover its most vulnerable working families. The Business Case for Expanding Medicaid in North Carolina explains how the Medicaid gap originated, why eliminating the gap is a good deal for North Carolina, and how Republicans’ long overdue alternative (replacing the Affordable Care Act (ACA) with block grants) is even less likely in the aftermath of this pandemic.
“Under the ACA’s Medicaid expansion provisions, it costs a state just 10 cents to deliver an extra dollar of healthcare to its neediest working families,” said Jim Doyle, president of Business Forward. “For eight years, Republican legislatures resisted expanding Medicaid on the grounds they were going to replace the ACA with something better, but there’s no replacement in sight, and Republicans’ favorite concept – block grants to states – has become unworkable during a pandemic.”
The report cites analysis from the Kaiser Family Foundation, which found that, before COVID-19, 234K workers and their families living in North Carolina have fallen into the Medicaid gap. Layoffs caused by the pandemic could cause another 178K North Carolinians to join them.
The ACA was designed to help workers with lower incomes obtain healthcare in one of two ways: (1) it gave workers earning $17,600 or more discounts to help them afford their own policies on the ACA marketplace; and, (2) it gave workers earning less than $17,600 access to basic healthcare through Medicaid (at no charge). When the GOP sued to overturn the ACA, the Supreme Court granted partial relief, including a ruling that allowed states to opt-out of expanded Medicaid. Twenty-four states initially refused to expand Medicaid, but only 12 still do. North Carolina is home to the fourth largest population of people who fall into the Medicaid gap.
Since President Trump took office, seven states have overruled their Republican state legislatures and expanded Medicaid (by referendum or by electing a pro-Medicaid, Democratic majority): Idaho, Maine, Missouri, Nebraska, Oklahoma, Utah, and Virginia. Despite North Carolina Governor Roy Cooper’s efforts, the Republican-controlled legislature has not yet passed legislation to expand Medicaid.
“The Trump Administration should be working with Congress and state legislatures to eliminate the Medicaid gap and make it easier for Americans losing their employer-sponsored insurance to enroll in the ACA,” said Doyle. “Instead, they’re making it harder for Americans to enroll in the ACA — and making it impossible for low-income workers and their families to qualify for Medicaid.”
THE TOPLINE:
1. The Affordable Care Act (ACA) helped workers with lower incomes obtain healthcare coverage in one of two ways: (1) it gave workers earning $17,600 or more discounts to help them afford their own policies on the ACA marketplace; and, (2) it gave workers earning less than $17,600 access to basic healthcare through Medicaid
(at no charge).
2. In other words, the ACA expanded Medicaid to cover workers with very low incomes who otherwise couldn’t afford coverage on their own. It’s critical for workers in low-paying fields, “gig” economy workers, and Americans dealing with disabilities.
3. Medicaid expansion is a good deal for states. The Federal government covers 90% of new costs; states cover 10%. In other words, it costs a state 10 cents to deliver $1 of new care to some of its hardest working families.
4. Moreover, providing that extra $1 of care can reduce the state’s healthcare spending in other areas (which offsets that 10 cents they spend). Some states expanding Medicaid have seen their overall healthcare spending drop.
5. Republicans sued to overturn the ACA. The Supreme Court rejected most claims, but accepted a few. This left the ACA with big holes that created unintended consequences.
6. Medicaid expansion is one of those holes and 22 states (all led by the GOP) initially refused to join — and 12 still do. In those 12 states, 2.6 million workers and their families are stuck in what experts call the “Medicaid gap.
7. Since President Trump took office, voters in six states have overruled their GOP legislatures and expanded Medicaid themselves (ID, ME, MO, NE, OK, UT). In Virginia, voters voted Republicans out of office and replaced them with pro-Medicaid expansion Democrats.
8. Mass layoffs caused by COVID-19 are making the Medicaid gap problem worse. An additional 1.9 million Americans in these states who’ve lost their job could soon fall into the Medicaid gap.
9. Republicans have opposed expanding Medicaid on the grounds they will soon offer a replacement for the ACA. But it’s been eight years, and they have yet to propose a replacement, let alone pass one. Political calculations that may have worked in 2012 could soon cost 4.5 million Americans their health insurance.
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