Medicaid expansion: A win-win for low-paid workers, public health

Medicaid expansion: A win-win for low-paid workers, public health

February 13 was a doubly significant day for North Carolina’s restaurant workers. Not only did it mark a national day of action for wage fairness, but it was also a day in which the General Assembly advanced a bill that threatens to do particularly grievous harm the people who serve our food.

By way of background, labor advocates use February 13 (i.e. 2/13) as a means to call attention to the miserly minimum wage earned by restaurant workers: it’s just $2.13 per hour. That’s right: an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage.

This is already far too little. But efforts to undercut an expansion of Medicaid in North Carolina would exacerbate the problems of the working poor – including restaurant workers – even further.

First, let’s be clear: the federally-funded expansion of Medicaid under the Affordable Care Act would provide tremendous value at a miniscule cost to North Carolina. It would create tens of thousands of jobs, bring billions of dollars into the state and, most importantly, improve public health for people like restaurant workers (and many others).

The Medicaid expansion will provide health insurance coverage to nearly 500,000 low-income North Carolinians and thereby dramatically reduce the state’s persistent and pernicious gap in access to affordable health care. .

Even better, the Medicaid expansion all but pays for itself. The federal government will fund the entire cost of the expansion for the first three years. At no point in the future will the federal contribution to the Medicaid expansion fall below 90 percent. Yes, for 10 cents on the dollar, we can insure half a million of our friends and neighbors.

But wait,” you’re saying, “how does this apply specifically to restaurant workers?”

Well, there are approximately 350,000 North Carolinians who prepare and serve our food — and they work for some of the state’s lowest wages, without access to crucial benefits like health insurance and earned paid sick days.

Nationally, 9 out of 10 restaurant workers surveyed reported that they have no health insurance through their employers. Here in North Carolina, 36.1 percent of hospitality industry workers report having no health insurance at all.

They can’t take time off, either. Eight out of 10 North Carolina workers in food preparation and serving-related occupations have no access to paid sick days.

This means that many people who serve and prepare your food probably don’t have health insurance, which means they face more health problems; and if they get sick, they can’t take time off from making the food that you eat. Sound like a public health problem? It is. But the median wage of these workers would make many eligible for the Medicaid expansion.

It’s a net money-saver, too. Expanding Medicaid means fewer uninsured North Carolinians, which will save money for the state and for local governments. According to an NC Institute of Medicine Medicaid brief, the state would save $65.4 million over the first eight years of expansion. Medicaid expansion will also bring more than $15 billion in federal funds to the state.

This money flows to health care providers and into local economies, boosting spending and employment. Estimates indicate that Medicaid expansion will create 25,000 new jobs in North Carolina by 2016.

If we don’t take advantage, neighboring states will. Virginia has already signaled its intention to take the Medicaid expansion. And with good reason: the American Academy of Actuaries estimates that private insurance premiums will be at least 2 percent higher in states that do not expand Medicaid due to cost shifting and unhealthier people buying subsidized insurance.

That means if we don’t expand Medicaid, you will pay more for health insurance; our state will have fewer jobs and less money in its economy; and the people who serve you food, along with hundreds of thousands of others in North Carolina, will be less healthy.

Every year that North Carolina delays implementing the Medicaid expansion, we will give up billions of dollars of economic prosperity and cause worse health outcomes for people throughout the state.

If we really want economic health to go along with public health, there is only one path that makes any sense. Expand Medicaid. Make people and communities in North Carolina healthier.

Sabine Schoenbach is a Policy Analyst at the North Carolina Justice Center’s Workers’ Rights Project.



(Image: Public domain, M. Nauman)