North Carolina should adopt a common sense, fiscally responsible approach to expanding Medicaid under the Affordable Care Act that draws upon models and lessons from the variety of programs adopted by other states.

Any expansion of Medicaid should be paired with a robust approach to reform that begins to shift Medicaid towards a value-based system that rewards quality of care rather than volume of care, thereby pushing program costs down even as spending increases to cover new enrollees.  Any expansion and reform of Medicaid must focus on quality metrics, health outcomes and cost savings.  In 2015 the legislature passed an outline for reforming Medicaid that includes the potential for moving toward value-based care. As agency staff and policymakers flesh out the details of this system they should consider expanding coverage while protecting patients and rigorously evaluating new models to improve outcomes and contain costs.

Hundreds of thousands of North Carolinians would be eligible for coverage under Medicaid if eligibility requirements expanded, including 52,700 veterans, 29,100 veterans' spouses1 and 189,000 people who need mental health care.  Currently, these individuals receive only state-funded care or no care at all.2  Additionally, the majority of individuals who need coverage and would be served under expanded Medicaid are currently working.3

Six states have gained approval from the federal government to use Medicaid expansion funds to finance innovative demonstration programs while extending coverage to all low-income citizens. Arkansas, Iowa, Michigan, Indiana, New Hampshire, and Montana are using this flexibility to simultaneously reform and expand their Medicaid programs. Some of the provisions these states are testing include using Medicaid funds to buy enrollees private insurance, incentivizing healthy behaviors, and automatic enrollment in work training programs. A paper published by Duke University’s Sanford School of Public Policy suggested pursuing a demonstration project whereby individuals earning less than 100 percent of federal poverty level are enrolled in the state’s Medicaid plan while individuals earning between 100 and 138 percent of federal poverty level are enrolled in private insurance plans offered through North Carolina’s health insurance marketplace.  This approach should be considered as one option for North Carolina.4 5

1 Haley, Jennifer M. and Genevieve M. Kenney. (March 2013). Uninsured Veterans and Family Members: State and National Estimates of Expanded Medicaid Eligibility Under the ACA. Urban Institute.

3 Garfield, Rachel and Anthony Damico. (January 2016). The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update. Kaiser Family Foundation.

4 Rudowitz, Robin and MaryBeth Musumeci. (November 2015). The ACA and Medicaid Expansion Waivers. Kaiser Family Foundation. 

5 Duke-UNC Student Medicaid Reform Team. (February 2014). A New Health Reform Framework For North Carolina

Additional Resources:  

Ku, Leighton, Brian Bruen, Erika Steinmetz, and Tyler Bysshe. (December 2014). The Economic and Employment Costs of Not Expanding Medicaid in North Carolina: A County-Level AnalysisCenter for Health Policy Research, The George Washington University.

Dickman, Sam, David Himmelstein, Danny McCormick, and Steffie Woolhandler. (January 30, 2014). "Opting Out Of Medicaid Expansion: The Health And Financial Impacts." Health Affairs Blog.

Dorn S, McGrath M, and Holahan J. (August 2014). What Is the Result of States Not Expanding Medicaid? Urban Institute.