N.C. Gov. McCrory: Federal Exchange & no on Medicaid expansion for now

Word this morning that Gov. McCrory has decided that North Carolina will have a Federal ACA exchange, and that we will not undertake the Medicaid expansion now. Several quick points:

  • Having the federal government run the exchange is a reasonable option. I would prefer that North Carolina do so because it would give our state more flexibility, but Republicans who control the N.C. General Assembly are still saying they are opposed to the ACA while offering no alternatives. Under these circumstances, going with the federal exchange makes sense.
  • Gov. McCrory is saying the Medicaid system is too broken to expand, and he is worried about the long run federal cost share issues. Both are a dodge. The Republicans in the General Assembly are opposed for ideological reasons and both the Speaker of the House and the President of the Senate want to run for U.S. Senate, so they are thinking about the upcoming primary. Other states like Arizona have explicitly said they will roll back Medicaid expansions if funding shares change over time; such concerns could easily be dealt with via legislation, and the state could likely get quite a lot of flexibility for other Medicaid changes they desire by linking them to an expansion. Here is a post with lots of links on the benefits of Medicaid expansion. IF you think that expanding health insurance coverage is an important enough goal to warrant using public policy to achieve that goal, then the expansion is a no brainer. Will the Governor or the General Assembly offer an alternative?
  • I have been predicting that N.C. will do the Medicaid expansion in spite of the state being run by Republicans; I will stick with that prediction for two main reasons, noted below.
  • First, the tax reform that Republicans prefer is to use a sales tax as much as possible to collect tax revenue (good report on options). Get rid of exemptions, broaden the base and all that. However, hospitals and health systems are typically exempt from sales tax, as are professional services for everyone. The desired tax reform route for Republicans will result in a massive tax increase on hospitals and health care systems. For them, they are surely going to balk at a large tax increase sans the Medicaid expansion. And if they balk, then other’s want out (like the Realtors) from the sales tax, and that starts to unravel the plan.I also predict that they will raise quite a fuss about expectations of providing uncompensated care when an option such as the Medicaid expansion exists (Diaz v. North Carolina).
  • Second, and perhaps most importantly, North Carolinians of all stripes are quite vested in the idea that we “aren’t the deep South.” I have lived in this state for 42 of my 45 years and this sentiment is broadly shared. To the North is Virginia that looks to be going ahead with a Medicaid expansion linked to revisions of the program despite having a Republican Governor and Legislature, and to the South is South Carolina and the rest of the deep South that is not planning to do a Medicaid expansion. North Carolina is squarely in the middle, both literally and figuratively. I predict that as this image settles in, it will not be a comfortable place for this state to remain for very long.

cross posted at freeforall

Author: Don Taylor

Don Taylor is an Associate Professor of Public Policy at Duke University, where his teaching and research focuses on health policy, with a focus on Medicare generally, and on hospice and palliative care, specifically. He increasingly works at the intersection of health policy and the federal budget. Past research topics have included health workforce and the economics of smoking. He began blogging in June 2009 and wrote columns on health reform for the Raleigh, (N.C.) News and Observer. He blogged at The Incidental Economist from March 2011 to March 2012. He is the author of a book, Balancing the Budget is a Progressive Priority that will be published by Springer in May 2012.

5 thoughts on “N.C. Gov. McCrory: Federal Exchange & no on Medicaid expansion for now”

  1. Don

    You make a critical point about how NC sees itself, which holds in part because as you know many people from further up north (e.g., my parents) retire there.

    But don’t Art Pope and the people he funded see it the other way round? Is not their vision of good governance more what you see in the Old South than than the New?

  2. Sure hope you’re right. I, too, had hoped the “not-the-deep-south” view would prevail, but I fear this may be the year that the pent up urges of North Carolina Republicans are too strong for them to see reason. I’m disappointed that the NCDOI’s insurance consumer assistance program will end up in the trash bin. They had a good plan and good people to execute it. Given how complicated the insurance marketplace will be, it’s unfortunate that the entire consumer assistance piece will end up in the lap of the feds.

  3. Second, and perhaps most importantly, North Carolinians of all stripes are quite vested in the idea that we “aren’t the deep South.” I have lived in this state for 42 of my 45 years and this sentiment is broadly shared.

    Well, maybe. I’ve been hearing this “New South” story about NC for a long time as well, and the state never quite seems to make it over the hump, at least in terms of its politics.

  4. I moved to NC in 2007 from Louisiana….just after the rise of Jin-dull basically sent Louisiana over the edge. Everything here in NC looks like the same thing is about to happen here. Gerrymandering and the firing of all state boards is basically going to put this state in the hands of the teabaggers for a while. The fact that Obama won here in 08 and then the tbgrs took over in 10 suggests that lots of people here don’t know what the hell they believe. Not a pretty picture at all.

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