• Commentary

The Misconceptions of Medicaid Expansion

“Georgia has expanded Medicaid, without Medicaid expansion.” 

That oft-repeated quote by a veteran Gold Dome lobbyist came to mind given recent events in the Tar Heel State.

On June 3 the North Carolina Senate overwhelmingly passed a bill that would significantly restructure healthcare delivery, combining various health policy reforms that had stalled for years into one package. Notably, the legislative momentum for all of these competing interests comes from Medicaid expansion. 

North Carolina, like Georgia, is one of 12 states that has not passed Medicaid expansion under the Affordable Care Act, which would provide coverage to able-bodied adults with incomes up to 138% of the Federal Poverty Level. 

Realizing that North Carolina would be adding 600,000 people to its Medicaid program if this bill passed, suddenly legislators were motivated to reconsider some of the most onerous healthcare regulations in the country. A recent study ranked North Carolina 46th overall in access to healthcare providers, in part due to strict certificate of need (CON) and scope of practice laws that limit access to facilities and providers. 

Thus, one provision of the bill would grant Advanced Practice Registered Nurses (APRN) full authority to see patients without direct physician supervision. Another provision would remove nearly all of the state’s authority to regulate the building or expansion of new healthcare facilities. 

Georgia, ranked 25th in the study despite having some similarly burdensome regulations on healthcare providers, could benefit from a similar approach. That’s especially true for a state that has 63 counties (out of 159) without a pediatrician and 79 counties without an OB/GYN, including nine counties without any primary care physicians at all.

But that approach isn’t worth the cost of Medicaid expansion. Here’s why. 

Proponents of Medicaid expansion in Georgia often cite that an additional half million people would be covered. Other studies project as many as 700,000 would be added. 

Yet, according to the most recent annual report from the Georgia Department of Community Health, Georgia added roughly 750,000 additional people on Medicaid between 2010, when the Affordable Care Act was passed, and 2021. 

This “expansion without expansion” provides an opportunity to examine the supplemental benefits that are often championed for a formal Medicaid expansion, such as creating tens of thousands of jobs and saving rural hospitals. 

Using data from the Georgia Department of Labor, we can analyze the growth in the number of healthcare jobs in the state from 2000 to 2020. In 2000, there were 468,000 healthcare workers in the state of Georgia. By 2010, that number had grown to over 606,000. In 2020, it was 713,000. 

This means the overall number of healthcare jobs in the state grew at a slower rate during the 2010s, when those 750,000 Georgians were added to Medicaid, than the decade that preceded it. There was a 17.6% increase in healthcare jobs during the 2010s, compared to 29.6% during the 2000s. 

By comparison, the state added roughly 500,000 Medicaid enrollees during the 2000s when healthcare jobs grew at a higher rate.

Nor has the number of physicians in Georgia kept up with this growth. In 2013, there were 205 physicians in the state per 100,000 residents. Despite a series of efforts by the state to increase that number, especially in rural areas, it only increased to 230 per 100,000 residents by 2020.

Despite the narrative that Medicaid expansion will save rural hospitals, most are struggling with an issue that expansion does not solve. In addition to declining populations, only a small percentage of their patients have commercial insurance that pays the full amount for care delivered.

North Carolina, like Georgia, utilizes private managed care companies for its Medicaid population. While specific reimbursement rates are not public — a story for another day — we do know that overall in North Carolina they reimburse providers at about 80% of cost, meaning hospitals lose money on every Medicaid patient they serve.

Despite all of these supplemental benefits that are evoked, at its core this is a debate over providing healthcare. Yet, having a Medicaid card in your pocket doesn’t necessarily equal care. In the latest Georgia physician survey, only 60% of physicians accept new Medicaid patients. That means more Medicaid patients are competing for appointments with those doctors, a problem that would be exacerbated by further expansion.

And perhaps in an even more worrying trend, only 64% of physicians reported accepting new Medicare patients (people aged 65 or older), long cited as the gold standard by those who would prefer to see the government completely in charge of the U.S. healthcare system. 

As for financing this expansion that will cost North Carolinians billions? The explanation for that one and its potential implications for Georgia will have to come in a future column. In the meantime, there are better ways to address healthcare without committing even more taxpayer dollars to this broken program.