Health council weighs cost of Medicaid expansion in North Carolina

(The Center Square) – A partial Medicaid expansion could cost North Carolina more than a full expansion, a state policy adviser estimated Friday.

States have the option to raise the income eligibility requirement for Medicaid to open the taxpayer-funded program to more participants.

Gov. Roy Cooper and other Democrats have pushed for raising the eligibility threshold from 42% of the federal poverty level to 138%, the maximum allowed under federal law. Republican lawmakers have rejected the proposal, offering a broader program with work requirements and premiums, among other alternatives.

Twelve percent of the state’s population remains uninsured, and many of them live below the poverty level, a rate that could be rising in the wake of the COVID-19 pandemic.

Julia Lerche, the chief actuary and policy adviser for North Carolina’s Medicaid program, said a full expansion could cost the state $400 million less than a partial expansion.

“It would cost the state more to cover a partial expand of Medicaid and only cover half the people,” Lerche told members of Cooper’s North Carolina Council for Health Care Coverage on Friday.

Raising the income requirement for the state and federally funded program would increase the federal share of the cost for the program. The federal government currently covers 67% of the state’s Medicaid program, while a full expansion would raise the federal share to 90%.

Lerche said with the income line above 138% of the poverty level, the state’s cost could be about $500 million in three years, with federal offsets in other programs. However, with the income threshold at 100%, the state could spend $900 million in three years.

States have asked the federal government to cover the full share of the cost with a partial expansion. Both President Donald Trump and former President Barrack Obama’s administrations have rejected the requests.

The council also explored the cost of improving health care access for North Carolinians on Friday. Health officials said 46% of residents received health care coverage from their employer, 18% were covered under Medicaid, 15% received Medicare assistance, 7% used the individual marketplace and 2% were covered through the military.

The council also is considering extending Medicaid coverage for specific groups, such as pregnant mothers and parents of foster children. Also up for discussion is a marketplace reinsurance program, which Lerche said would reduce premiums for higher-income populations and cost the state $163 million.

Other options, such as offering small business tax credits, could be less costly but would vary based on participation. Still, association health plans that allow small businesses to join together to offer coverage for their employees would incur zero cost for the state.

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