Thursday, February 7, 2013

Jobs, Economic Development, and Medicaid Expansion. Information Bulletin #370 (2/2013). In the last three Information Bulletins, we discussed the Affordable Care Act’s Medicaid expansion which provides access to medical care for all people whose incomes are under 138% of the federal poverty level. We discussed the impact on people with disabilities and on hospitals. This Information Bulletin looks at the broader economic impact. Medicaid expansion’s extraordinary impact on State employment and economic development is true for all states, but the loss for those States that do not agree to expand will be devastating. Has your State agreed to Medicaid expansion (which begins in January 2014)? [Fact Sheets for States are available. Email address below and identify your State.] If your State is still struggling with high unemployment and remains stalled in post 2007 economic recovery, these federal funds unequivocally will increase employment throughout the State, reduce State taxes as more people become employed, and have a profound economic multiplier effect throughout your State’s economy. If your State has not yet agreed, your task is clear. There are no other new federal programs that offer your State 100% federal reimbursement for three years for providing health care to hundreds of thousands of low-income people, and then a federal guarantee of no less than 90% federal reimbursement in year six and thereafter. 1. Here are some examples of the new federal Medicaid funds that will come into these States for the next six years, if they agree to Medicaid expansion: Alabama $9.835 billion in new federal funds Florida $18.817 billion Indiana $8.057 billion Louisiana $6.936 billion Michigan $13.566 billion New Jersey $8.497 billion N. Carolina $19.683 billion Oklahoma $1.630 billion Tennessee $10.356 billion Virginia $9.131billion Show me the money? There it is - not play money, but real money! Some States have voiced concern with the reliability of the federal commitment. If sometime in the future the federal government changes its reimbursement level, then State governments could reconsider their commitment as well. We think the State governments have the federal government over-the-barrel. We do not buy the argument that “once a program begins, it cannot be ended.” Many States have terminated existing program. If your State is worried, make your State’s Medicaid expansion explicitly dependent on the federal commitment. 2. If your State thinks of itself in economic development terms, it should want to know the guaranteed federal rate of return, i.e, how much federal funds for each State dollar. Here are some examples: Alabama $21.90 federal dollars to $1.00 State dollar Kentucky $23.10 to $1.00 Louisiana $21.60 to $1.00 Michigan $20.80 to $1.00 Mississippi $23.00 to $1.00 New Jersey $16.90 to $1.00 Oklahoma $22.20 to $1.00 S. Carolina $23.10 to $1.00 Utah $23.70 tp $1.00 W. Virginia $23.10 to $1.00 We do not believe that any State can invest one State dollar and receive these returns anywhere else, and we believe that any good business person would jump at those rates of return. There is no rational business reason, and it makes no business sense whatsoever to not participate. Is your State concerned about jobs and employment? Let’s look at one example of the employment impact as a result of the increase in newly eligible Medicaid recipients. Medicaid expansion will result in hospitals hiring more personnel to meet the increased demand for Medicaid services. Because we’re talking large hospital increases in Medicaid reimbursements for health care, that means hospital employment at all economic levels. 3. Here’s the approximate one year increase in hospital reimbursements as a result of Medicaid expansion, which will translate into jobs. Florida $2.4 billion Louisiana $630 million Michigan $442 million Mississippi $593 million Missouri $881 million New Jersey $253 million N. Carolina $971 million Oklahoma $494 million Tennessee $359 million Texas $2.807 billion Virginia $411 million ADVOCATES: You can convince your State to participate. Ohio, New Mexico, Nevada and Arizona have recognized the extraordinary economic implications of Medicaid expansion and last month announced their States were signing on. You can convince your State to sign on. Here are a few suggestions. 1. We do not believe that the newspapers and other media have looked at and understood Medicaid expansion as an economic issue. Write letters and columns. Educate the media! 2. We hope your State Chamber of Commerce has reviewed Medicaid expansion as an economic issue. Telephone them. Ask them if they want economic development and employment, and if yes, what are they doing regarding Medicaid expansion? 3. Most legislators have so much on their plates that they cannot or do not understand Medicaid expansion from an economic perspective. Even though it will not require any state funds for three years, so the 2013-2014 budget may not be impacted, nevertheless get to your legislative leaders and explain Medicaid expansion from an economic perspective. 4. Each State has a hospital trade association. What are they doing? How about the Managed Care industry? Home health? Nurses? Pharmaceuticals? They all will expand their services, hire more people, and help your State grow. Get to them We realize every advocate has a long agenda. Medicaid expansion is the most important step in health care since 1965 and in economic recovery since 2008. Make sure your State joins in! Steve Gold, The Disability Odyssey continues Back issues of other Information Bulletins are available online at with a searchable Archive at this site divided into different subjects. Information Bulletins will also be posted on my blog located at To contact Steve Gold directly, write to or call 215-627-7100. Ext 227.

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