Expanding Medicaid is a good deal. So why are some states holding out?

North Carolina Gov. Roy Cooper addresses an election-night gathering of the North Carolina Democratic Party in Raleigh, N.C., on May 17. (Eamon Queeney for The Washington Post)
Suddenly, Medicaid expansion became a front-line battle marking the red-blue divide over “Obamacare.”
By Karen Tumulty, Washington Post

“This,” jubilant North Carolina Gov. Roy Cooper declared, “is the working families bill of the decade.”

Cooper — a Democrat governing with a Republican legislature — had plenty of cause for celebration when I talked to him on Monday. He was about to sign a bill making North Carolina the 40th state to expand Medicaid under the Affordable Care Act, a cause that has been at the top of his agenda since he took office in 2017.

“The kinds of people who are going to be helped by this are essential workers, like early childhood educators, restaurant staff, nursing home workers. There’s a long list of people who are in that gap between making now too much for Medicaid and not enough to be able to qualify for subsidies under the Affordable Care Act,” Cooper said. “So this helps close that gap, and we think it’ll be about 600,000 North Carolinians who will benefit from this and finally be able to get health insurance.”

When the Democratic-led Congress passed the ACA in 2010, it assumed that every state would broaden its Medicaid program to cover people who lacked coverage and were too poor to qualify for subsidies that the law provides to help households earning between 100 percent and 400 percent of the federal poverty level. The law contained both a carrot and a stick. The carrot: generous aid from Washington to reimburse states for their additional costs in covering people earning up to 138 percent of the poverty level — which today is roughly $41,000 for a family of four. The stick: the threatened loss of all federal Medicaid funding for states that failed to expand coverage. But in 2012, the Supreme Court ruled that making Medicaid expansion mandatory was unconstitutional; states had to opt-in to the program.

Suddenly, Medicaid expansion became a front-line battle marking the red-blue divide over “Obamacare.” Initially, only about half the states opted in; others — North Carolina, among them — adamantly refused to.

As the law has grown in popularity, and after Republicans failed in their own efforts to come up with something to replace it, more states are coming around. Still, “I’m surprised that it has taken this long,” former congressman Henry A. Waxman (D-Calif.), an architect of the law, said in an interview. “I thought it made no sense not to go for the bargain the federal government was holding out for the states.”

That was also the argument Cooper made, relentlessly reminding North Carolinians that their legislators were turning down $521 million a month from Washington. But his endeavor was also an exercise in coalition-building, bringing together medical providers struggling to take care of the uninsured, county commissioners who saw hospitals and small businesses in their communities closing, chambers of commerce touting the benefits of a healthier workforce.

A key ally: the North Carolina Sheriffs’ Association, which argued that expanding Medicaid was a crime-fighting measure, given how many people in county jails were suffering from substance abuse and mental health disorders “that should be treated by medical professionals in a medical facility.”

As Cooper recalled: “There were a lot of pieces to the puzzle as we thought about this. I vetoed budgets over it. We had standoffs, but we weren’t able to get it done until we were finally able to bring this coalition together, which is truly a nontraditional coalition.”

By last year, both the House and Senate in North Carolina had passed measures expanding Medicaid; earlier this month, they worked out the remaining differences between their two versions and passed the bill by overwhelming margins. It will not go into effect until the state passes a budget, which could take until June.

Still, Cooper’s formula for success is not necessarily a template for redder holdout states, where an estimated 3.4 million people could gain coverage if Medicaid were expanded. Two of them alone — Florida and Texas — account for just under 2 million of those uninsured.

Meanwhile, a pandemic-era federal law that guaranteed continuous coverage to low-income people through Medicaid — and that was responsible for significant growth in the program — is set to begin expiring in April. The “unwinding” will continue through the remainder of the year, and the Kaiser Family Foundation estimates it could mean that between 5.3 million and 14.2 million people could lose their Medicaid eligibility.

Precisely how many will be left uninsured as a result, however, is difficult to predict, said Chris Jennings, who was a top health-care adviser in the Clinton and Obama administrations. With jobs and income on the rise, the optimistic scenario is that most will find coverage through their employers or have enough money to buy it on the exchanges that were set up under the ACA.

Some on the right still contend that Medicaid expansion is just another welfare program and, in the words of Texas Gov. Greg Abbott (R), “a tax increase waiting to happen.” But 13 years after the enactment of the ACA, what has finally become clear, even to conservatives, is that the law is here to stay. “This is the best deal on the table,” Cooper said. “I mean, this is really the only deal on the table.” Which is why it is becoming increasingly hard to understand why some states still refuse to take it.


Karen Tumulty is a deputy opinion editor and columnist covering national politics for the Washington Post