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Francis Koster: Medicaid expansion’s benefits worth investment

By Francis Koster

When compared to other wealthy countries our life expectancy ranks 35th in the world, and falling. And among all 50 states, our life expectancy ranks 37th. Why is that?

When I was still working as an administrator in pediatrics, I would often pass through waiting rooms full of mothers holding crying children who had a birth defect. With proper care during pregnancy, much of this damage was preventable. These memories still break my heart.

A key tool that prevents these birth defects is health insurance. As my dad used to say, “All behavior has consequences — good behavior, good consequences, bad behavior, bad consequences”.

When people talk about health care in America, they often use the words “health care system.”There is no such thing.    There are actually two very different “systems.” The first is the “health insurance system” that is supposed to pay for medical care and the second is the “health care delivery system” — the ambulances, hospitals, doctors and nurses who treat patients.  It is important to be clear about this when discussing health care in America.

North Carolina is limited by a health insurance environment that is so bad that we rank 41st of all 50 states for the percentage of insured residents.

It does not need to be this way. Under current federal law, all states can expand Medicaid — largely paid for by the federal government. North Carolina is one of only 12 states that has not seized that opportunity.

More than 1 million North Carolinians have no health insurance — about one out of 10 of our neighbors. Overwhelmingly, they are poor. When you are poor and uninsured, minor illness becomes major because the patient does not have the ability to go to a doctor. They get sicker and wind up in the hospital, which does not get paid. Then, some percentage of those sick people lose either physical capability or mental sharpness, become less employable and wind up needing welfare or other forms of public support. Taxes go up.

I am a fiscal conservative. I am often surprised by people who do not know the difference between an expense and an investment. Spend $20 on flowers for your front yard, and it is an expense. Invest $20 to insulate your electric water heater and you get a reduction in energy expense of about $20 annually.  You earned 100% annual return on your investment for life.

When a state adopts Medicaid expansion, 90% of the cost is paid for by the federal government. Some people argue that their state cannot afford the cost of their 10% portion. Many reliable studies have found the adopting states earn positive rates of return on their 10% investment due to the cost-saving impact of preventive care or early treatment, reductions in state spending for unemployment benefits, mental health care and a decline in enrollment in taxpayer supported programs like supplemental social security.

One of the best reviews of a state’s return on investment in Medicaid expansion was done by the Kaiser Family Foundation, which reviewed over a thousand separate studies.

They found that in states that adopted Medicaid expansion, total employment grew 1.3%, more than those states that did not adopt.  For example, Colorado experienced 31,074 additional jobs as a result of adoption, and a growth in healthcare employment of 3.2%. The employment of handicapped workers went up because the employer did not have to pay their health insurance.   

In North Carolina, health care providers provide about $1 billion dollars a year in “uncompensated care” because people without insurance cannot pay for it. Insuring patients through the Medicaid expansion would pay a significant chunk of that “uncompensated care,” which would allow health care providers to survive in low-income counties.

Since this Medicaid expansion opportunity became available, three-quarters of all rural hospitals that have closed in America have been in the 12 states that rejected it. From a patient’s point of view, after the program was adopted by most states in the union, deaths among older adults who gained insurance were reduced (depending on the state) between one-third and two-thirds of prior rates.

The percentage of pregnant women covered by insurance doubled. States that have expanded Medicaid saw a 50% greater reduction in infant mortality than non-expansion states.

As a state, what values do we hold that block our adopting a program that improves the quality of life of the least fortunate amongst us, lowers private insurance rates, pays a positive financial rate of return, helps hospitals survive and protects children? North Carolina is breaking my heart.

Koster lives in Kannapolis. He finished up his career as chief innovation office at one of the nation’s largest pediatric healthcare systems. You can see the sources of all facts cited in this article at his website theoptimisticfuturist.orgw

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