The Hidden Cost in Medicaid Expansion

by Dee Watson
Libertarian for NC Senate 16

The politicians who argue that Medicaid expansion is “a no-brainer” and will cost nothing either are ignorant of the actual ramifications or deliberately ignore them.

These politicians don’t want to admit the possibility that some people will lose their subsidy on the health exchange, that families may lose their homes to repay expenses, or that millionaires may receive Medicaid.

For people 55 and older, Medicaid is not free health insurance. It’s a loan. In some cases, it has aspects of a predatory loan. Most people don’t know this. Politicians ignore this provision, but it’s disingenuous even to discuss expansion until people understand Medicaid Recovery.

In North Carolina, Medicaid tracks the hospital care, prescription drug, or personal care expenses of any recipient over 55 and will try to recover those expenses from the person’s estate when they die. That means the government can recover the expenses before family members can inherit property. (NC General Statute §108a 70.5).
Such action hasn’t impacted many people in North Carolina yet, since traditional Medicaid has an asset test that makes recovery unlikely. But in states that have expanded Medicaid, many families have lost their homes. Rachel Corbett’s Atlantic article Medicaid’s Dark Secret tells how this happened in Massachusetts. ("Medicaid's Dark Secret," The Atlantic, October 2019)

Federal law gives states great leeway in recovering Medicaid expenses and only requires recovery for long-term care patients over 55. Some states that expanded Medicaid have limited recovering expenses to long-term care patients. North Carolina must determine if they want to do this.

There is a downside either way. When the federal government created the Affordable Care Act, Medicaid expansion required removing the asset test. This means that Medicaid expansion patients can have considerable wealth, as long as they are low income.

We usually think of low-income people as poor, but many low-income people have significant assets, such as a nice home and car, and possibly rental property.  Another group is family farmers whose farms may have appreciated but cannot generate large incomes.

If North Carolina expands Medicaid and doesn’t change the recovery requirements, farmers unable to generate income above 138 percent of the federal poverty line may have liens placed in their farms. 

Dee Watson is the Libertarian candidate for NC Senate 16. She devoted 20 years of her professional life to oncology research, working as a statistician and statistical programmer for Duke University and in the pharmaceutical industry. Follow Dee on Twitter @ElectDeeWatson.

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  • Brian Irving
    published this page in News 2022-03-31 10:16:08 -0400
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