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Tuesday, August 3, 2021

How Expanding Medicaid Kicks Thousands Off Private Insurance And Costs Lives

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The last-minute rush to pass a budget before the beginning of the new fiscal year in July could lead to some bad decisions by state lawmakers in Raleigh, North Carolina. One of those bad decisions could be expanding Medicaid, which threatens to kick nearly 160,000 North Carolinians off their private insurance and onto taxpayer-funded Medicaid. Thirty-nine states have already expanded Medicaid under Obamacare, with similar effects.

Over the decades, Medicaid has drifted far from its purpose. The program originally aimed to provide health coverage to the truly needy, including seniors, people with disabilities, and low-income children. However, Obamacare gave states the option to expand eligibility to a new class of able-bodied adults. States that have green-lighted this expansion have enrolled twice as many able-bodied adults as they anticipated, at more than twice the predicted cost.

Imagine that—a government program that ended up not working as intended and costing more than expected. But what’s often overlooked in the expansion debate are the kitchen table consequences of forcing thousands of people off private health insurance and into a government program. This is known as the “crowd-out” effect, and it’s a real problem.

Right now, nearly 160,000 North Carolinians receive federal subsidies for private insurance plans but would fall into Medicaid eligibility if the state were to expand. But the federal subsidies will end if North Carolina expands Obamacare, forcing those individuals into Medicaid.

Just to be clear, there would be no new coverage happening here. These new enrollees would simply be moving from private coverage to Medicaid. In other words, North Carolina taxpayers would be funding a wholly unnecessary welfare expansion for those who already have private coverage—and likely do not want to switch their health insurance plans—at the expense of our most vulnerable neighbors who need Medicaid the most.

While this makes no sense as a whole, it would be an offer most individual families can’t refuse. Even if they didn’t want to enroll in Medicaid, those who used to benefit from the subsidy would now have to pay the entire cost of their premiums out-of-pocket to keep their current plans—thousands of dollars every year.

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