Marion Johnson, Think NC First Policy Analyst

North Carolina lawmakers have finally started to budge on Medicaid expansion. Outgoing N.C. House Speaker Thom Tillis recently stated that he “encourage[d] the state legislature and governor to consider it.”[i] Governor McCrory has acknowledged that he’s “leaving that door open.”[ii] The health arguments for expanding Medicaid are clear, but so far they haven’t encouraged state lawmakers to fully embrace the idea. If we want to get Medicaid expansion through the door Governor McCrory is leaving open, we need to reframe the debate 

Economists Benjamin Sommers and Donald Oellerich noted Medicaid’s rising enrollment numbers during and after the recent recession, and made a connection: Medicaid’s role in poverty alleviation was growing.[iii] And with the Affordable Care Act’s expansion rollout, that role was likely to grow even further. So in 2013, Sommers and Oellerich decided to get a sense of Medicaid’s real financial impact on its beneficiaries. 

The authors used data from the Current Population Survey and the Supplemental Poverty Measure to predict what would happen if current Medicaid beneficiaries lost their access. Using the Supplemental Poverty Measure (SPM) rather than the federal poverty line allows for a more comprehensive view of how people and families spend money. Unlike the official federal measure, the SPM takes out-of-pocket medical spending into account, which is exactly what Sommers and Oellerich needed for their analysis. 

According to their model, Medicaid reduces out-of-pocket medical spending by almost $500 per person.[iv] It also decreases child poverty rates by 1 percent, and decreases elderly poverty rates by 0.7 percent.

“Overall, Medicaid kept at least 2.6 million – and as many as 3.4 million – out of poverty in 2010, making it the U.S.’s third-largest anti-poverty program.”[v]

Sommers and Oellerich acknowledge that their counterfactual – the complete elimination of Medicaid – isn’t a possible reality. But they note that “many states have cut or are considering reducing benefits and increasing cost-sharing, and proposals to move to a block-grant approach to funding Medicaid could lead to major cutbacks in enrollment.”[vi] Additionally, as of September 20 states have opted out of Medicaid expansion, which means that thousands of low-income Americans will continue to lose out on Medicaid benefits.[vii]

Expansion advocates are fighting an uphill battle by arguing for more government intervention in healthcare. Americans are at best ambivalent about the Affordable Care Act, and their opinion on that doesn’t look like it will change anytime soon.[viii] But in our current economic climate, with a sluggish recovery, could be an opportunity for new economic messaging. Expanding Medicaid means addressing state poverty rates. It means giving people a way to become less dependent on government services. By framing it as a solution to an economic problem, we can tie Medicaid expansion to an issue that is often at the top of voters’ minds – the economy.[ix] Maybe then we can make some real progress.



[i] Morrill, Jim. (October 24, 2014). “US Senate candidate Thom Tillis reverses course, urges NC to consider expanding Medicaid.” The Charlotte Observer. Available at http://www.charlotteobserver.com/2014/10/23/5263123/thom-tillis-once-foe-of-medicaid.html

[ii] Wilson, Reid. (July 14, 2014). “N.C. Gov. McCrory: ‘Door open’ to Medicaid expansion.” The Washington Post. Available at http://www.washingtonpost.com/blogs/govbeat/wp/2014/07/14/n-c-gov-mccrory-door-open-to-medicaid-expansion/ 

[iii] Sommers, Benjamin and Oellerich, Donald. (September 2013). The poverty-reducing effect of Medicaid. Journal of Health Economics, Vol. 32, Issue 5. Available at http://www.sciencedirect.com/science/article/pii/S016762961300091X

[iv] See note iii.

[v] Ibid.

[vi] Ibid.

[vii] The Advisory Board Company. (September 4 2014). “Where the states stand on Medicaid expansion.” Available at http://www.advisory.com/daily-briefing/resources/primers/medicaidmap

[viii] Gallup. (October 2014). “More Still Say Health Law Has Hurt Instead of Helped Them.” Available at  http://www.gallup.com/poll/178094/say-health-law-hurt-instead-helped.aspx

[ix] Washington Post. (November 5 2014). “2014 Midterm Exit Polls.” Available at http://www.washingtonpost.com/wp-srv/special/politics/2014-midterms/exit-polls/