NC may be the last state to expand Medicaid for a while

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By Michael Ollove

Stateline/ Pew Trusts

For years, state Sen. Phil Berger says, there was nobody in North Carolina who opposed Medicaid expansion under the Affordable Care Act more vehemently than he did.

“If there was somebody in the state of North Carolina that had spoken out publicly in opposition to Medicaid expansion more than me, I’d like to talk to that person,” Berger said in an interview last month. From the time the ACA passed in 2010 until last spring, “my attitude was Medicaid expansion was wrong for North Carolina,” he said.

Berger, a Republican, is president pro tempore of the North Carolina Senate, the most powerful position in the chamber, so his opposition virtually guaranteed that the legislature would not expand the joint federal/state program to include an additional 600,000 adults with low incomes.

That’s why Berger’s recent conversion from opponent to proponent has shot North Carolina to the top of the list of the states that are most likely to break ranks with the other 10 that have refused to expand Medicaid.

But it’s hard to imagine the other states doing the same anytime soon, which means that an estimated 6 million Americans will continue to be denied coverage.

In November, South Dakota became the 39th state to approve expansion under the ACA, but it did so by a citizen-initiated ballot measure over the opposition of the state’s GOP governor and legislative leaders. Six other states also have expanded Medicaid that way. But among the holdouts, only Florida allows that option, and the pathway is so arduous there that proponents recently postponed their campaign for two years.

“We’re pretty close to the end” of expansion by way of citizen initiatives, said Kelly Hall, executive director of The Fairness Project, a national organization created to promote Medicaid expansion and other progressive goals through ballot initiatives.

Of course, it’s possible that GOP leaders in the remaining states, the largest of which is Texas, could have a change of heart like Berger did.

The North Carolinian said he had three objections to expansion: He feared that extending Medicaid coverage might discourage people from seeking work; he worried that the federal government could one day renege on its pledge to cover 90% of the cost of expansion, leaving states holding the bag; and he was concerned about adding to the unpredictability of North Carolina’s wildly fluctuating Medicaid expenses.

That last issue was resolved in 2021 with North Carolina’s transition to a Medicaid managed care system, which Berger says has made expenditures much more predictable. He abandoned his first objection, he said, after coming to realize that most of the younger, nondisabled adults who would be covered under expansion have jobs, are caregivers or are students.

As to the federal government backing out of its commitment on the federal match, Berger noted that it hasn’t done so under Democratic or Republican presidents, or with either party in control of Congress. “It ain’t going to happen,” he said.

Inducements for expansion

When former President Barack Obama signed the Affordable Care Act in 2010, it included a requirement that states expand Medicaid to enable all adults with low incomes to enroll in the program. In 2012, however, the U.S. Supreme Court ruled that Medicaid expansion was optional for states. Nearly half the states and Washington, D.C., expanded in 2014, as soon as the new law allowed, and more followed.

States that rejected expansion turned down substantial inducements. In the original Medicaid program, the federal government pays anywhere from 50% to nearly 78% in matching funds depending on a state’s per capita income. (Congress temporarily raised that federal match rate during the COVID-19 public health emergency.) But under the ACA, the federal match to cover the Medicaid expansion population is 90% for every state.

States that expanded Medicaid experienced job growth, particularly in the health care sector, as a result of the federal largesse. Expansion also reduced the amount hospitals needed to pay for uncompensated care, which was particularly helpful for financially strapped rural hospitals, many of which have closed in the past two decades.

In 2021, in response to the pandemic, the Biden administration added another inducement for the holdout states: a 5 percentage point bump in their federal match under traditional Medicaid for two years. That amounts to hundreds of millions of dollars in extra funding for those remaining states. Florida, for example, would pocket nearly $4 billion of extra federal money if it expanded, according to an analysis by Manatt Health, a research, legal and consulting organization. Mississippi would get $739 million.

“We’re losing money [in Mississippi] every minute we don’t expand, not to mention the human cost,” said Brandon Jones, campaign manager for the Southern Poverty Law Center, which supports Medicaid expansion.

Among the holdouts, only Florida allows for a ballot initiative process that could be used to expand Medicaid. (Wyoming’s law does not allow initiatives involving revenue or appropriations, as a Medicaid expansion would.) But even in Florida, the legislature has made qualifying for a ballot initiative so difficult that backers of Medicaid expansion recently decided to try to get on the ballot in 2026 rather than 2024 as they initially had intended.

“Given the complexities we have here in Florida that you don’t see in other states, even though the will of the people of Florida is there for expansion, but we need time to gather the funds to run a successful campaign,” said Jake Flaherty, campaign director of Florida Decides Healthcare, which is leading the expansion effort.

Flaherty acknowledged that hostility toward expansion from Republican Gov. Ron DeSantis and GOP leaders in the legislature make it virtually unthinkable that an expansion bill could pass. The same is true in many of the other holdout states, including Texas, where recently reelected Republican Gov. Greg Abbott and Lt. Gov. Dan Patrick remain staunchly opposed. Even if privately sympathetic to expansion, GOP lawmakers in Texas are unlikely to cross their party’s state leaders.

Ballot foreclosed in Mississippi

Until recently, Mississippi seemed to be fertile ground for a successful ballot campaign. In fact, several years ago, proponents of expansion launched an initiative campaign with an eye toward getting on the ballot in 2022. But in 2021, the state Supreme Court threw out the state’s ballot initiative process. The ruling pertained to an initiative concerning medical marijuana, but it scuttled the Medicaid expansion ballot campaign.

There have been proposals in the Mississippi legislature to devise a new initiative process that can withstand legal challenge. But for now, proponents of expansion say they don’t see a pathway, and passage in the legislature would have to overcome the steadfast opposition of Republican Gov. Tate Reeves and state House Speaker Philip Gunn.

The state’s GOP leaders remain opposed despite the fact that a majority of Mississippians want to see Medicaid expanded, according to polls. Jones, of the Southern Poverty Law Center, who is a former Mississippi House member, says his private conversations with Republican lawmakers have convinced him that they largely feel the same way. But, he said, they are fearful of crossing their leaders on the issue.

With Gunn’s announcement that he will not run again for his seat, Jones said he believes the legislature will eventually pass expansion.

“Do we do it this year? Probably not. It’s an election year, and we still have a speaker and a governor who are opposed,” Jones said. “But anything big we’ve ever done in Mississippi seems to happen real quickly … that’s what happened with changing the state flag. So, this could be the year it happens with Medicaid expansion.”

Reeves’ office didn’t respond to a request for comment, and Gunn’s office said he wasn’t available for an interview.

In Wyoming, proponents drew encouragement from state House passage of a Medicaid expansion bill for the first time in 2021, but the measure ran aground in the Senate that year.

Proponents in Kansas also have been heartened by newly reelected Democratic Gov. Laura Kelly’s plan to make another run at expansion next year. Polls there too indicate strong support for passage, with more than 70% in favor. Kansas is surrounded by states that have expanded. (Kansas does not have a citizen ballot initiative process. Last August’s referendum in which Kansas voters chose to keep abortion protections in the state constitution was placed on the ballot by the legislature.)

Nevertheless, April Holman, executive director of Alliance for a Healthy Kansas, a coalition of 128 Kansas organizations working toward expansion, said the Republican legislature and its leaders have proved impervious to popular opinion — though pressure is rising.

“For me, I’m always hopeful or I wouldn’t be able to do this work,” Holman said. “But it requires building a movement that is too large and too loud to ignore and that’s what we’ve been trying to do.”

Neither the new Republican House speaker in Kansas, Daniel Hawkins, nor Republican Senate President Ty Masterson responded to Stateline requests for comment.

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