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At The Daily Signal: JLF Analysts Urge N.C. Leaders To Reject Medicaid Financing Scheme

Writing at The Daily Signal, JLF’s Joe Coletti and Jordan Roberts explain another reason why the idea of adding half a million able-bodied, childless adults to North Carolina’s Medicaid program is a poor policy choice: the financing scheme known as the Medicaid provider tax.

Supporters argue that expanding Medicaid is virtually “free” to the state, since the federal government pays 90 percent and the provider tax would cover the remainder. This was Cooper’s proposal each of the past two years and is how a Republican-sponsored alternative, “Carolina Cares,” would have been financed.

Strangely, providers have been eager to support the tax and thus incorporate new costs into the state budget. The reason is simple: It would be a windfall for them. As the Council of State Governments explained: “Most, but not all, providers will receive more in increased Medicaid payments than they paid in taxes, depending upon the amount of Medicaid services provided.”

Compared to the 66 percent federal match for traditional Medicaid, the more generous 90 percent match for expansion would net providers many times more in Medicaid payments than they pay in taxes.

The governor’s spokesperson, Jamal Little, put it bluntly: “Hospitals and other health care providers are for Medicaid expansion because it increases their bottom line and helps get more patients insured.”

This sleight of hand must end, and North Carolina should be the state to shine the light that ends it.

Be sure to read the entire Daily Signal piece that explains why the Medicaid provider tax is a financing scheme that must end. It’s one more reason added to the list of why North Carolina should not expand Medicaid.

So if North Carolina shouldn’t expand Medicaid, then how do we help vulnerable populations? How do we help every North Carolinian? JLF’s Becki Gray offers numerous recommendations for expanding insurance coverage that are grounded in choice, innovation, and competition.

  1. Repeal Certificate-of-Need laws.
  2. Encourage the use of telemedicine.
  3. Expand the scope of practice for providers, allowing them to offer services they’ve been trained to to provide.
  4. Amend supervisory requirements to allow experienced practitioners to provide care where appropriate.
  5. Introduce dental therapy as a way to extend dental care cost effectively.
  6. Encourage direct primary care practices to continue to grow and flourish.
  7. Allow and expand small business health plans to offer more flexibility and customization of health insurance plans.
  8. Adopt a rule, as is being considered by the Trump administration, to require doctors and hospitals to disclose the rates they negotiate with insurance companies.
  9. Establish a foundation to offer grants or low-interest loans for expansion of medical services, assistance with medical training costs, and housing and personal needs for mid-level providers in rural areas. Use a percentage of hospital nonprofit property, income and sales tax relief to fund the foundation. Allow other businesses or philanthropies to contribute to the fund.
  10. Lead the nation and region by establishing a Southeast compact to offer health insurance plans across state lines.
  11. Encourage competition, discourage monopolies and market consolidation in the hospital, insurance and pharmaceutical industries.

Donna Martinez / VP of Marketing and Communications

Donna came to the John Locke Foundation in January 2003 after freelance writing for Carolina Journal and contributing to projects for the North Carolina Education Alliance. He...

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