On Medicaid expansion in North Carolina

by George Hartzman

Greensboro’s City Councillast week voted on a resolution calling for an Obamacare-related Medicaidexpansion that North Carolina’s state government declined to enact.

In my view, the problemwith Medicaid expansion isn’t that the services shouldn’t be offered. Theproblem is recent health care reform didn’t fix the cost issues associated withour nation’s health care system.

Considering how manytimes the law has been “adjusted” since the Congressional Budget Office’s (CBO)last update, I have found assessing the financial implications of expandingMedicaid in North Carolina difficult.

On March 21, the Obamaadministration’s stated “the Affordable Care Act (ACA) reducesthe deficit, saving over $200 billion over 10 years”.

In online debates atCouncilman Tony Wilkins’ Facebook page, and on Ed Cone’s blog before and afterthe council vote, UNCG Senior Research Fellow Dr. Andrew Brod stated: “It’ssilly to say that the ACA is “mathematically unsustainable. …The CBO projectsthat the ACA will (slightly) reduce the federal deficit” and “the ACA willreduce the federal deficit over time, precisely because “how we pay for it” hasalready been nailed down in the law.”

But the latest ACAdeficit reducing accounting appears to no longer be operable.

The last CBO projectionsdidn’t include changes and delays affecting total cost results instituted afterDecember 2013, including delayed penalty revenues and patients retaining theability to keep and/or purchase low cost catastrophic policies that were supposedto have been replaced with higher priced alternatives in 2014.

More enrollees signed upfor 100 percent subsidized care than anticipated. The Obama administration’smath needed about 40 percent of 18 to 34 year-olds to offset the higher costsof older enrollees. The latest youth number is about 27 percent, and a goodchunk might not necessarily be healthy.

According to the AmericanMedical Association, Congress and both Bush and Obama didn’t enforce theSustainable Healthcare physician Growth Rate (SGR) 16 times at a cost totaxpayers of $154 billion with what’s call the SGR “doc fix”.

The University ofChicago’s Vineet Arora wrote: “Because the ‘doc fix’ costs so much, it wasremoved from the calculation of the cost of the health reform bill to make itmore likely that the [ACA] will pass.”

Former Associate Directorof the White House Office of Management and Budget James Capretta wrote “Whilepushing ACA through Congress, President Obama … proposed to add [the SGR “docfix”] to the national debt, but he did not want those costs to count against[the] ACA, because they would explode the myth of deficit reduction. So hissolution was to pass the “doc fix” in separate legislation. …the President’stotal bill for health care, with an unfinanced [SGR] “doc fix” shows deficits,not deficit reduction.”

In my view, “Obamacare”is a package of legislation, not just the ACA as has been widely publicized.

A March 2010 letter fromthe CBO to House Budget Committee Chairman Paul Ryan, Obamacare legislationincluding the ACA disclosed “enacting all three pieces of legislation would add$59 billion to budget deficits over the 2010–2019 period”. Mr. Ryan hasn’t saidmuch about the issue since. According to, Ryan’s career to datehealth industry contributions total $1,636,911.

The health and insuranceindustry’s large political campaign contribution track record correlates totaxpayer funded subsidized healthcare having the highest price inflation of anysector of the economy since 2000.

December 9, 2010’s SGR“doc-Fix” altered ACA subsidy formulas. If the SGR cut scheduled for April 1,2014 doesn’t occur, at least $140.4 billion of Obamacare’s expected 10-yeardeficit reduction math looks to be in jeopardy, as Medicaid payment levels aretied to some Medicare reimbursements and correlated to private health carepremiums.

My understanding of CBOrules, is if the SGR repeal becomes permanent, the $140.4 billion then countsas deficit increasing, as opposed to its current state of legal limbo, underwhich the CBO doesn’t have to score the SGR as a deficit expense. The CBO didnot reply to inquiries for comment.

I believe the ACA waspassed without fixing what’s broken, but preserved the worst of it, making ourfiscal situation even more precarious without public disclosure.

It feels like America’shealth and insurance industries don’t maintain high profit margins by providingsuperior care and/or medicine, but by financing the political process withwealth transferred from patients and taxpayers.

In my view, manyDemocrats are just as guilty as some Republicans for allowing our health caresystem to become what appears to be a skimming operation. Some campaigncontributions look like legal forms of extortion on the part of electedofficials via the SGR “doc fix” among other extensions, as some healthcare andinsurance industry donors appear to legally bribe legislators in exchange forartificially inflated taxpayer-funded profit.

Greensboro CouncilpersonSharon Hightower asked: “Do people’s well being really have a price?” I replied with “Unfortunately, there isa price.” It’s not something nice to say, but there has to be a limit to howmuch we forcibly encumber others.

I believe we should befree to spend as much of our own money to keep ourselves alive and well.Borrowing to pay inflated costs hidden behind accounting gimmicks makes oureconomy less efficient, competitive and unfair.