Why North Carolina Republicans Finally Agreed to Medicaid Expansion

Free-market reforms and an infusion of federal funds convinced GOP lawmakers to ditch their opposition to the Obama-era policy.

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Demonstrators supporting Medicaid expansion in 2013. (Photo by Joe Raedle/Getty Images)

Republican support for Medicaid expansion in North Carolina was almost unthinkable a decade ago. Thom Tillis, then the speaker of the state House, guided a bill to passage in 2013 that blocked any future governor from unilaterally expanding Medicaid, an effort he touted during his 2014 U.S. Senate campaign as “fighting against Obamacare.”

But North Carolina Democratic Gov. Roy Cooper signed a Medicaid expansion bill Monday that enjoyed broad and enthusiastic support from the state’s Republican majority: House members even violated parliamentary protocol to give the bill a rare standing ovation as they sent it to the governor’s desk.

While other right-leaning states have expanded Medicaid through ballot initiatives or executive action, North Carolina is the only state to do so with GOP lawmakers leading the way—a sign that after more than a decade fighting Democrats, Republican resistance to Obamacare may be on its last legs.

Medicaid expansion: a primer.

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  1. Greg

    This is a great article! As a Republican legislator and Chair of Health and Human Services in Oklahoma, I went through this exact transition in 2018. I was 100% opposed to ObamaCare (and still think it is bad policy and fiscally unsustainable). Repeal and replace was a big reason I supported Trump in 2016 even though I had a lot of moral issues with him; he was the guy with the balls to do it. Republicans had two years of total control in DC, and they didn’t do it. They didn’t even really try to do it! When Pelosi took the gavel back, I realized that Medicaid Expansion was here to stay. The amount of money this program brings to a state is incredible, and once you start receiving the money, there is not really any way a state could ever wean itself from the federal subsidy without “harming” hundreds of thousands of their citizens. The moment a majority of the states accepted expansion was the point of no return. No senator in DC could ever vote to end the program once their state was receiving the dollars. They would literally be voting to pull healthcare away from people. The deal was done.

    At that point (literally almost the day after the 2018 elections for me) every thoughtful Republican State Legislator had to start transitioning in their mind. There was a huge population in my state that didn’t have coverage for healthcare because of our refusal to accept Medicaid expansion. There were no programs to cover them, because the industry (nationally) assumed they were covered by Medicaid. There were no options for these people. It was bad health policy and bad fiscal policy to continue to refuse the federal offer of Medicaid expansion.

    For Oklahoma, thankfully, it came through a ballot measure. If that wouldn’t have happened, I think our legislature would still be fighting about it. Instead, we made it through the pandemic with the coverage in place for many formerly uninsured people, which helped our healthcare system survive. Now, instead of being the guy in the state senate fighting for expansion, I’m the one who gets to do actual healthcare policy work like leading our move to “value based care”.

    I’ll always think ObamaCare was and is a bad idea and that it will hasten the fiscal disaster that our nation is heading toward. A state raging against the machine and refusing the accept the reality that ObamaCare will never go away while keeping poor families uninsured just to give the middle finger to the feds is also a bad idea. Reality is creeping in on every state legislature, and I applaud my colleagues in North Carolina for doing what they had to do.

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      DougAz

      Old Liberal Doug applauds!

      I'd be glad to give you my pitch on how M4A would free up 10% of non value add Healthcare costs, and move us back to the 10% (now 20%) we used to spend 35 yrs ago. It's incredibly pro business and family friendly.

      Hurrah for Republicans in NC working for their uninsured citizens

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  2. Jfan

    The expansions in health care spending, including all aspects of Obamacare, took place in an economic environment of ridiculously low interest rates and Federal Reserve purchases of treasury bonds which allowed governments to spend money as if it were free. Now that that era is over, this trend may be unsustainable. In the past, this would have led politicians to restrain themselves from spending programs. If voters and politicians have been conditioned by the last twelve years to reject fiscal discipline, the medical spending will provoke an economic crisis, though many people will want to blame it on other things such as defense spending or inadequate taxation.

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    Party-san

    > "Much conservative opposition to the ACA was based on fundamental disagreements about the government’s role in providing health insurance."

    While I'm sure there were some conservative thinkers who opposed it on those grounds, I can't help feeling that the opposition to the ACA was primarily sheer bloody-mindedness at not wanting to be seen to support or even cooperate with the Democrats.

    The endless court challenges, the refusal on the parts of red states to accept it to the detriment of their own budgets and people, and ultimately the absence of any plan to replace it leads me to still believe that the main goal was to shoot it down instead of some form of ideological purity.

    The healthcare system in the US is barely worthy of the name "care", and I appreciate the political impossibility of changing it, so to have the government simply dig in against even a relatively minor change (as against a structural one) purely for the sake of owning some libs seems callous.

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    Gibby

    Unfortunately we (Republicans)were never serious about this issue. We settled for hot air. Which then became an emotional habit (Trump)

    In the short term this is a dead issue. Of course in the long term I fail to see how it doesn’t contribute to the entitlement bomb that’s awaiting us in the future

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      DougAz

      M4A will save the day!

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  5. Stormer93

    My concerns with Medicaid are twofold. First was that the Federal government would eventually abruptly drop how much cost it carries. That seems less likely now after the pandemic, although it's still possible.

    The second was that Medicaid is really a horribly run program that has a terrible reputation with doctors and specialists. Unlike VA care and Medicare, it's reimbursement policy is much more chaotic and contains extra headaches to deal with. Many find it easier to just refuse patients on Medicaid altogether. I had a relative who couldn't get care for that reason and had to artificially boost her income to get over the threshold and back to traditional insurance before her specialist would see her.

    In the end, I suppose Medicaid access is better than nothing at all, but people who think this is the end all solution don't know what they're talking about. I think a better approach would be to make the subsidies available to lower incomes rather than relying solely in Medicaid for low income coverage. But it's too late to go back now.

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    1. Jack H Wolf

      Medicaid has a bad reputation because they pay less than others and the patients tend to be more often problematic . As an MD I only took Mcd for family members of patients and patients in the nursing home (Medicaid actually pays much of nursing home care, Mcr only covers the first few months), though I was participating Medicare. But you are correct it is better than nothing.
      I agree that just lowering the subsidies probably makes more sense.
      I also think they can reduce the subsidies, they are very generous, as tends to happen when the Ds plan it and the Rs wont have anything to do with it.

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  6. Very Old Grumpy Guy

    Obamacare=bad. Let's replace it with something better!! Nah, to paraphrase talking Barbie, "Policy is hard." Let's just work on dumb cultural edge cases.

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    1. Jack H Wolf

      Any suggestions. I dont see the problem, it is really just a subsidy and otherwise not different from any other health insurance policy that you buy.

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      1. Very Old Grumpy Guy

        Well, apparently the Tea Party and Republicans thought there was a VERY BIG PROBLEM. If I thought something was a VERY BIG PROBLEM, I might spend some time concocting a solution, rather than just run around b**thing about it. Maybe I overestimate my analytical capabilities, but I think I would have come up with something to address the VERY BIG PROBLEM if given 13 years.

        Just another example of the total inanity of my former party.

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        1. Jack H Wolf

          OK I got you VOGG, dont always pick up on sarcasm.

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          1. Very Old Grumpy Guy

            It is my bad . I apologize for my poor communication skills.

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    Rick Henderson

    As someone whom followed this issue and reported on it for several years, this is an excellent overview of how the debate evolved in N.C. The managed-care change was huge. The GOP Legislature was able to save billions of dollars over a few years by moving from the fee-for-service model, which paid for every doctor’s visit or procedure, to managed care, which essentially offered a set fee per enrollee (with more money for patients with bigger health problems). As noted, easing some licensing requirements for both rural care and spending on medical facilities made expansion more palatable for conservative lawmakers. They took on the hospital cartel. Kudos to them. Great reporting and analysis.

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  8. Zdebman

    The NC expansion is less an endorsement of Obamacare and more reflective that eventually everyone will take government money perceived to be free.

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    1. Bigdonmck

      You are correct. 100% correct.
      I worked in a pharmacy that was 90% Medicaid Rx's back in the '70s. I once saw a gentleman hand is an Rx for 10 aspirin. He told me that he was hung over. So he went to see the doctor upstairs from us for a hangover cure.
      We were forced by law to fill that Rx. We were allowed to charge the State of Illinois $1.80 for filling the Rx plus the cost of ingredients. We got $1.86. And the doc upstairs charged Medicaid the fee for an office visit.
      That type of visit occurred on a daily basis. So charge a a tiny co-pay for the office visit and Rx.

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  9. Jack H Wolf

    Wealthy societies should take healthcare out of the realm of discretionary expenditures that shut out poor people into a basic part of the safety net.
    Every OECD country has done this other than the US. And from all metrics they have better outcomes and not one democratic country has chosen to abandon their system of universal healthcare. Sure, there are plenty of griping about the systems, but even the conservatives in Europe dont broach the subject of getting rid of universal health anymore than conservatives here argue for defunding the police.
    I say this as a fairly frugal citizen who opposed BBB or the school loan giveaway for clueless students. I also say it as a physician of 35 years who found the worst part of American healthcare is that it is so money driven that it has lost site of the reason for being- fighting disease. And in most other ways I am a die hard capitalist, but I think healthcare should not be for sale to only those who can afford it.
    Since I got my Medicare and a good supplement, I have had no fear of financial catastrophe from getting ill. I have not paid a medical bill and life is so much better than when every illness comes with a price tag and fear of bankruptcy . We should not have the police charge you to respond to an emergency and neither would the ER charge you if you fall down the stairs. I understand the libertarian view that nobody owes anybody anything, but my utilitarian view is that a rich society can afford basic health care for its citizens, and they all do, except us, and it promotes the general welfare as much as anything we can do. Everybody doesn't need college but they might need to be freed from disease.
    Now, as I see the liberal/conservative divide, conservatives have opposed social welfare on principle, and thus often get shut out of the picture of impacting programs in the way conservatives are good at- being frugal and making sure that the taxpayers money doesnt go for giving 16 year old men boobs. I was a strong supporter of ACA, but I actually think they were a bit over generous. My carpenter friend who made about 50-60K had an 80% subsidy where I think he could have afforded more. But what I see on this and also on the environment, is that conservatives by just opposing everything, get little input into the shaping of programs and keeping them cost effective. So I think that my state legislature here in NC did the right thing.Expand full comment

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      Cogitatio

      Just to be clear, Medicare and Medicaid are not discretionary items in the budget. This is part of the problem, they automatically increase "as required," with no limiting factors. This has caused Medicare to grow from under $200 billion in 2000, to a projected $854 billion in 2023.

      Medicare is projected to exceed the largest non-discretionary budget item, Defense, this year. And that does not even include Medicaid, which is right behind it. Together, they are projected to a total of $1.6 trillion in 2023. Considering that total revenues in 2023 are projected to be around $5 trillion, these two programs alone will consume most of the budget in the next ten years. And then there is Social Security, which will cost $1.3 trillion this year....

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      Davidlatkinson

      Here's what I hate about the ObamaCare. In 2018, I was diagnosed with sarcoma cancer, and by August, I had to have my leg amputated. That November, I learned that it had spread to my lungs, and chemo / radiation treatment was started, lasting well into 2019. Now, we are retired with no pension, living on our two SS checks and taxable withdrawals from our traditional IRA. At the time, we had just under $51K in funds outside of our IRA that had been invested into mutual funds and bonds years ago. In late 2018, I had to liquidate those funds to pay for out-of-pocket expenses such as travel expenses, parking, lodging and food in expensive Downtown Seattle, which is where we were holed up at to care for my cancer. Radiation treatment alone kept us there for over a month. At the time, I thought we'd be in good shape to keep our ObamaCare subsidy, which had been the case in the years prior. Unfortunately, the mutual fund sale created a capital gain that wasn't reported to me until February, which was in the next tax year. That capital gain put us $5,188 over the subsidy threshold, which meant that we had to give back our $15,174 subsidy. That's the problem with the ObamaCare subsidy - exceed the threshold by one lousy dollar and you have to give the entire thing back. In hindsight, I could've sold just some of those mutual funds or we could've taken out a small home equity loan, but when you don't know how much profit you've made due to capital gains until the following year, you are just guessing. I profusely apologized to my wife over my blunder, but she forgave me - "you had a few more pressing things on your mind - like staying alive" is how she put it.

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      1. Jack H Wolf

        I am in favor of nobody having your experience which is terrible.
        Any system is going to have people fall through the cracks but short of having something like M4A which was politically unpassable, you are going to have to have set some sort of subsidy limit. There are also the states where working people fall below the threshold but didnt approve the expanded Mcd.
        I dont see the problem being with the concept of ACA, just the particulars of your situation which were unfortunate.
        Ideally I would like to see medicine removed from the entire profit system and everybody have total coverage. Yes, copays, and such but that nobody should fear economic ruin for getting sick, which is true in the other OECD countries.

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