NC faces a 'Sophie's Choice' on Medicaid expansion

The decision by North Carolina policymakers not to expand Medicaid has ignited a firestorm of controversy. Advocates for expansion appear to believe the decision should have been a slam dunk. The N.C. Justice Center assures us that "Medicaid saves lives," a claim reiterated by Jonathan Oberlander, a health policy expert at UNC-Chapel Hill.

Yet Avik Roy, a Manhattan Institute senior fellow, claims that "Medicaid is America's worst health-care program."

These dueling experts have decades of health policy experience among them. So who's right?

Advocates for expansion point to a New England Journal of Medicine study that found significantly lower death rates among poor adults in states where Medicaid was expanded. Yet deaths actually rose in one state that expanded Medicaid (Maine) while declining in Arizona and New York, according to Roy's careful analysis. This is not very reassuring proof that Medicaid saves lives, especially when one considers how the study was done.

Researchers did not actually track Medicaid recipients and compare them with their insured and uninsured counterparts. Instead, they compared county-level mortality statistics for childless adults in each state that expanded Medicaid with those in a neighboring state that had not expanded.

More importantly, the study essentially attributes observed mortality differences between states to Medicaid expansion when they might have arisen from sizable population differences. For instance, at the state level, the only mortality result that was statistically significant was when comparing New York with Pennsylvania. But as Roy explains, this is an extremely flawed comparison in light of the substantial differences between New York and Pennsylvania in terms of poverty rates (14.1 percent vs. 11.5 percent) and presence of ethnic or racial minorities (38 percent vs. 16 percent). Both factors have well-established connections to mortality risk.

What's interesting is that there's a much better study of Medicaid that avoids all of the flaws of the one expansion advocates repeatedly trot out. It used a randomized controlled trial - the gold standard of scientific evidence - to track the experience of 10,000 individuals randomly assigned to Medicaid coverage in Oregon. Limited funds precluded expansion to all eligible individuals, so a lottery was judged the fairest way to select those who would receive Medicaid.

This meticulously executed study compared the experiences of the Medicaid winners with those who remained uncovered and found that Medicaid had no impact on mortality risk. In short, to argue that Medicaid saves lives is to cherry-pick the available evidence, favoring a flawed study over a much more methodologically sound study.

Both studies do show improvements in general health attributable to Medicaid, but the extensive evidence shows the superiority of private health insurance over Medicaid. Why does this matter? Because, according to the nonpartisan Kaiser Family Foundation, 24.1 percent of those below the poverty line have private health insurance coverage. Putting such individuals on Medicaid may well make them worse off from the standpoint of access to care and health outcomes.

Moreover, everyone above the poverty line who would have qualified for Medicaid had Gov. Pat McCrory and the N.C. General Assembly elected to pursue expansion now is going to be eligible for subsidized private health insurance coverage through the Affordable Care Act's exchange. Expansion literally would have denied them this opportunity.

North Carolina policymakers faced what I've termed a "Sophie's Choice" on Medicaid expansion. Agreeing to the expansion might well have helped some uninsured North Carolinians, but it also would have hurt many others who either have or could have obtained private health insurance coverage. The correct path is not nearly as simple as expansion advocates might make it seem.

I don't know what our state ultimately will decide about this in the years ahead. The best solution, now being worked out in states such as Arkansas and Ohio, might be one in which those on Medicaid are allowed to enroll in private health insurance on the exchange. What I do know is that the public is best-served by knowing all the facts, not just those cherry-picked by advocates on one side or the other.

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About the Author


Christopher J.

  • Christopher J. Conover is a Research Scholar in the Center for Health Policy & Inequalities Research at Duke University, an adjunct scholar at AEI, and a Mercatus-affiliated senior scholar. He has taught in the Terry Sanford Institute of Public Policy, the Duke School of Medicine and the Fuqua School of Business at Duke. His research interests are in the area of health regulation and state health policy, with a focus on issues related to health care for the medically indigent (including the uninsured), and estimating the magnitude of the social burden of illness. He is the recent author of The American Health Economy Illustrated and is a Forbes contributor at The Health Policy Skeptic.

    Follow Chris Conover on Twitter.

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