Skip to Content

Good news: North Carolina expanded Medicaid. Bad news: It’s not a silver bullet.

While Medicaid expansion is good for hospitals and their patients, it’s not enough to make up for unfair reimbursements from mega-profitable insurance companies.


North Carolina expanded Medicaid.

After years of debate across the state, after months of pushing and pulling on both sides of the aisle, North Carolina Republicans finally passed Medicaid expansion.

It’s good news, and many North Carolinians are breathing a collective sigh of relief.

It is estimated that Medicaid expansion will help approximately 600,000 North Carolinians access healthcare. These are people who live near or below the poverty line who will now have health insurance that they couldn’t afford on their own. These uninsured North Carolinians have been stuck in the “coverage gap” – adults who are not eligible for Medicaid but can’t afford private health insurance. Those left in the coverage gap often “are forced to get by with patchwork charity care or skip care altogether,” according to an article in the New York Times.

Until recently, North Carolina was just one of 12 states that had not yet expanded eligibility for Medicaid coverage. Under former President Barack Obama’s Affordable Care Act, enacted in 2010, federal tax dollars will cover approximately 90 percent of a state’s cost for Medicaid expansion. The remaining 10 percent will be paid for by the state.

Why is coverage so important?

Research indicates that the more individuals who have health insurance, the fewer people die. A study by the National Bureau of Economic Research found that in states with Medicaid expansion, annual mortality declined by 9.4 percent.

Medicaid expansion is also good for hospitals, especially rural ones, whose populations are disproportionately covered by the program. Many hospitals serve a large uninsured population, which means they often are operating at a loss. Medicaid expansion is a step in the right direction, but it’s not a cure all.

That’s because Medicare and Medicaid payments from the government do not cover the cost of care. In 2020, the Medicare Payment Advisory Commission found that hospitals experienced a negative 8.5 percent margin on Medicare services, according to the American Hospital Association. Also in 2020, combined underpayments to hospitals from Medicare and Medicaid amounted to $100 billion. This is a significant burden on hospitals, especially when you consider that these two programs pay for the vast majority of medical care in the U.S.

On top of this, commercial payments are increasingly being slashed due to aggressive payors throughout the country. Meanwhile, “hospitals and insurers face drastically different financial realities,” reports Becker’s Payer. While the nation’s largest health insurers UnitedHealth Group and Elevance Health experienced record third-quarter profits, large health systems like HCA and Tenet faced significant financial losses.

Don’t get us wrong: Medicaid expansion is a net good. It helps struggling hospitals and, more importantly, patients. However, it’s not enough — insurers need to play a fair role in making healthcare accessible and affordable, in part by paying hospitals sustainably, and actually covering the care those hospitals provide.

Original Article:

Subscribe to Un-covered Essentials

Insurer policies limit coverage and disrupt patient care, while producing record profits for corporate shareholders. Stay informed with the Un-covered newsletter.