Publisher's note: This post, by Brian Balfour, was originally published in the Budget & Taxes and Healthcare section(s) of Civitas's online edition.
If he's not careful, Gov. Pat McCrory may be on course to have a "Pence problem" in 2015.
In the days immediately following the mid-term elections, Gov. Pat McCrory insisted that - in spite of his party maintaining strong supermajority status in both houses of the General Assembly - North Carolina "is still very divided," adding, "We've got to recognize where there's differences and then try to have conversations."
Among the conversations McCrory would like to have with his legislature is the topic of Medicaid reform and expansion. Expanding Medicaid into the states is a major component of Obamacare, but is something 23 states (including NC) have refused to do.
McCrory has indicated that his preference is to first "fix" the state's Medicaid program, which has been plagued with cost overruns of hundreds of millions of dollars over the past few years, and then he'd be open to considering expansion.
Most recently, however, the Governor said in a radio interview that he may consider following the model put forth by Indiana Gov. Mike Pence, which simultaneously alters the Medicaid system while expanding it.
Pence originally sold the plan as a "conservative" alternative to Medicaid expansion in order to maintain support from his political base. But conservative groups saw through the label and called Pence's bluff.
The Foundation for Government Accountability
(FGA), one of the nation's premiere advocates for patient-centered healthcare reform, slammed Pence's plan
as "a massive new entitlement for childless adults."
Indeed, a 2012 study by the Urban Institute
examined the demographic makeup of the currently uninsured that would be newly eligible for Medicaid under Obamacare's expansion. Nationally, about 4 of every 5 newly eligible for Medicaid would be a working age adult with no dependent children. In North Carolina, that figure is more than 3 of every 4 newly eligible adults.
The Heritage Foundation also expressed grave concern, stating
, "The state's willingness to accept the enhanced federal funding incentive under Obamacare makes Indiana vulnerable to higher costs, uncertain funding, and less flexibility."
Among the most relevant "reforms" included in Pence's plan are: an expansion of eligibility to able-bodied, working age, childless adults earning up to 138 percent of the federal poverty level (about $33,000 for a family of four); robust Medicaid benefits mandated by Obamacare for enrollees - which limits the state's flexibility for coverage options; and a form of health savings account for enrollees, but one that would be almost completely financed by taxpayers.
Moreover, Pence's plan has no requirements for enrollees to have been uninsured for any period of time before enrolling in the expanded Medicaid program, encouraging more people to drop their private insurance to sign up for the taxpayer-funded Medicaid benefits.
Aside from these more technical concerns, however, there are wildly unpopular aspects to the Pence plan that could really alienate McCrory's base of support in 2015 and beyond if he were to follow suit.
First, Obamacare's Medicaid expansion is paid for in large part by cutting more than $700 billion from seniors' Medicare benefits
, according to Congressional Budget Office estimates. Knowing that expanding Medicaid to able-bodied, childless working age adults comes at the expense of Medicare benefits for senior citizens predictably hits a sour note with voters. An FGA poll of North Carolina voters
released last week revealed that an overwhelming 68 percent of voters said they are less likely to support Medicaid expansion in light of this knowledge.
Secondly, according to the Obama administration's own Department of Justice
, nearly 1 in 3 of those who become newly eligible for Obamacare's Medicaid expansion would have had previous time served in prison or jail. Unsurprisingly, the thought of extending Medicaid to childless ex-cons at the risk of crowding out coverage for more needy families does not sit well with voters. Indeed, FGA's poll also showed that 57 percent are less likely to support Medicaid expansion when given this knowledge, compared to just 17 percent who responded they would be more likely to support.
Lastly, we know that as the Medicaid budget grows, the less money there is left in the state budget for other priorities, such as public education and public safety. Some refer to this as the "Pac-Man" effect, as Medicaid gobbles up money from other portions of the state budget. When voters were reminded of this fact in the FGA poll, a whopping 67 percent said they are less likely to support Medicaid expansion in NC.
The more voters learn about Medicaid expansion, the more they oppose it. Gov. McCrory would be wise to listen.
A version of this article originally appeared in the Charlotte Observer