One of the most dangerous – yet persisting – lies out there about Medicaid expansion is that North Carolina is already paying for it in other states. Yes, at this point, perpetuating that talking point as fact is the same as disseminating a lie, because it has been debunked too many times to say it’s a misunderstanding or a myth.
I attended an event this week where Dr. Leighton Ku, author of the infamous Cone Health study on the “economic benefits” of Medicaid expansion, continued to propagate the misinformation as one of the main points of his presentation (a study for which the findings have been debunked time and time and time again).
Ku explained that since expansion has cost the federal government $347 billion so far, and North Carolina generates 2.4 percent of total federal tax revenue, that we’ve contributed $8.3 billion to Medicaid expansion in other states since expansion began. This is the same logic that PolitiFact used to give a similar claim from Gov. Roy Cooper a “Mostly True” rating in early 2017. Sounds straightforward enough, right?
Well actually, this overly simplistic comparison completely ignores two key facts. First, that North Carolina has a net-positive tax revenue relationship with the federal government; second, that North Carolina expanding Medicaid would not take away funding from other states, only increase the spending total.
North Carolina already receives more money from the federal government than the state pays in federal taxes. This net-positive relationship means we cannot possibly be “sending money to other states” for anything. In fact, 39 states have net-positive relationships with the federal government. This is made possible in part by the net-negative relationship of the other 11 states, and in part by deficit spending.
Which leads to the second point ignored by Ku, the governor, and the mainstream media: if North Carolina expands Medicaid, federal spending to other states will not proportionately decrease. If federal Medicaid expansion funding is a pie, adding North Carolina into the distribution of the pie does not decrease the size of the pieces for other states; it increases the size of the pie. As an entitlement program, Medicaid is funded based on the number of participants, not on a set budget. The number of eligible people who enroll is how many the federal and state governments have committed to finance. So, North Carolina expanding Medicaid does not mean that other states get less money for their programs, which would be the case if expansion was truly “bringing our money back to North Carolina.”
Also, there is no “pot o’ gold” set aside for Medicaid expansion that North Carolina is not tapping into. The Congressional Research Office has been clear: any new spending on Medicaid expansion is deficit spending. That is, every federal dollar spent on North Carolina Medicaid expansion would need to be borrowed by the federal government – adding to the national debt.
So, how are North Carolina taxpayers paying for expansion in other states when the state already receives more than it pays from the federal government, and the expansion of its Medicaid program would not “take back” the money from other states? In short, they aren’t.
In typical liberal media fashion, the News & Observer not only picked up the Cone study findings for an opinion piece by one of its own editors, but they put the big lie in the headline. “NC taxpayers have paid 8.3 billion to expand Medicaid elsewhere,” it reads.
Funny how progressives act worried about taxpayers when it suits them, but completely ignore the impact on state and federal taxpayers of continuing to grow government entitlements at a time when our nation is $22 trillion in debt.
