'Economic and social benefits of Medicaid expansion are immense,' says lead author of a new report.
Expanding Medicaid eligibility in the 14 remaining states under the American Rescue Plan (ARP) would create more than 1 million jobs and boost states' economies by $350 billion, says a new report from the Commonwealth Fund and researchers at the George Washington University’s Milken Institute School of Public Health.
The ARP encourages states to expand their Medicaid programs to cover adults up to age 65 with incomes at or below 138 percent of the federal poverty level—$30,305 for a family of three in 2021—according to a press release.
As of this month, 14 states have income limits well below that level: Alabama, Florida, Georgia, Kansas, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming. Missouri and Oklahoma passed ballot initiatives to expand coverage but have yet to implement expansion, and Wisconsin has a partial expansion covering adults up to 100 percent of poverty.
The ARP increases federal funding for states that adopt the Affordable Care Act’s (ACA) Medicaid expansion by paying 90 percent of the cost of covering newly eligible adults. It also adds a five-percentage-point “bonus” federal match on existing state Medicaid expenditures for two years, the release says.
The U.S. could see health, economic, and employment gains, both in the 14 states and in the nation overall, if the 14 states adopt Medicaid expansions, according to the report, The Economic and Employment Effects of Medicaid Expansions Under the American Rescue Plan.
Expanding Medicaid into the 14 states, the report says, would create:
Job growth: In just the 14 states, employment would rise by 837,000 jobs in 2022, including 299,000 in Texas, 135,000 in Florida, 83,000 in North Carolina, 64,000 in Georgia, and 50,000 in Missouri. Some 209,000 more jobs would be created across the country as economic activity ripples through other states.
Most of the job growth would be in healthcare, but about 56% would occur in other sectors such as construction, insurance, retail, finance, and other industries.
Health insurance gains: In the 14 states, 4.45 million fewer people would be uninsured and Medicaid program enrollment would increase by 6.69 million in 2022.
The top five increases in Medicaid enrollment would be in Texas (1.75 million), Florida (1.38 million), Georgia (680,000), North Carolina (620,000) and Missouri (400,000), with the federal government covering almost all of the new healthcare costs.
Higher state and local tax revenues: Federal revenue to the 14 states would increase by $49 billion in 2022, leading to higher state and local tax revenues. That's because the additional federal Medicaid revenue stimulates economic activity, ultimately leading to higher state and local tax revenue.
The ARP five-percentage-point bonus federal match on existing state Medicaid spending would equal $8.5 billion for the 14 states in 2022 alone, coupled with the additional $43.8 billion in federal matching funds that the states would earn for covering newly eligible adults under Medicaid expansion.
Stronger state economies: With the inflow of federal funding, if the 14 states expand Medicaid, total economic activity will grow by more than $600 billion and personal incomes will grow by $218 billion in these states over the years 2022 to 2025.
"This study shows that with the additional federal support in the American Rescue Plan, Medicaid expansion in the remaining 14 states could revive state economies and create more than 1 million new jobs, in addition to helping millions of low-income Americans gain health insurance," Leighton Ku, Ph.D., director of the Center for Health Policy Research at the George Washington University Milken Institute School of Public Health and lead author of the report, said in the press release.
"The economic and social benefits of Medicaid expansion are immense," he says, "and would ripple through the broader U.S. economy."
“With the additional federal support in the American Rescue Plan, Medicaid expansion in the remaining 14 states could revive state economies and create more than 1 million new jobs, in addition to helping millions of low-income Americans gain health insurance.”
Leighton Ku, Ph.D., director of the Center for Health Policy Research at the George Washington University Milken Institute School of Public Health
Carol Davis is the Nursing Editor at HealthLeaders, an HCPro brand.
KEY TAKEAWAYS
All but 14 states have expanded Medicaid programs under the American Rescue Plan.
More than 1 million jobs could result from Medicaid expansion into all 50 states.
Medicaid expansion would increase federal revenue to the 14 states by $49 billion in 2022.