A new study by the Kansas Hospital Association makes a compelling economic case why Gov. Sam Brownback should allow the federal expansion of Medicaid: Not only would the expansion enable more than 150,000 Kansans to get needed insurance, it would inject more than $3 billion into the state’s economy and create 4,000 jobs over the next seven years.
What’s more, the expansion could save the state more money than it costs.
The study estimates that the expansion would help create about 3,400 new jobs in 2014 and 4,000 new jobs by 2020. These jobs would be not only in hospitals, clinics and nursing homes but also in businesses that support the health care industry.
Also, the more than $3 billion in federal funding that Kansas would receive between 2014 and 2020 would help increase Kansas’ gross state product by nearly $1.9 billion over that time period, the study estimates.
KHA president and CEO Tom Bell likened the economic impact of this federal spending to the planned National Bio and Agro-Defense Facility in Manhattan – which Brownback and federal lawmakers are falling all over themselves to secure.
The expansion would have a bigger economic benefit per capita for Kansas than many other states because Kansas has among the stingiest Medicaid eligibility criteria in the nation. Currently, only adults who have children and earn less than 32 percent of the federal poverty level ($5,900 for a family of four) are eligible. The expansion would increase the income eligibility to 133 percent of the poverty level ($30,660 for a family of four).
A study released this month by the Kansas Department of Health and Environment estimated that the expansion would cost the state an additional $600 million over 10 years. However, the KHA study estimates the expansion would save the state money by moving some adults the state now cares for, such as those with mental illnesses, onto Medicaid and by reducing other costs. The study calculates a net savings of $82 million from 2014 to 2020, in large part because the federal government pays for 100 percent of the cost of expansion the first three years.
Though the expansion would provide an economic boost, not expanding would do the opposite. That’s because the Affordable Care Act reduces payments to help hospitals that serve low-income uninsured patients (in expectation that many of these patients would be joining Medicaid).
“It amounts to additional real cuts to hospitals,” Bell said.
Brownback and state lawmakers should allow the expansion because of how it would improve the lives of citizens. But beyond compassion, the expansion makes economic sense.
That’s why seven other GOP governors – including, as of Wednesday, Florida Gov. Rick Scott – have set aside politics and ideology and done what was best for their states: expanding Medicaid.
For the editorial board, Phillip Brownlee