Monday, February 4, 2013

Medicaid expansion and jobs

"Own goals" in soccer occur when a team kicks the ball into its own net, resulting in a point for the other team. Own goals are usually accidents.

The Republican-led North Carolina General Assembly seems poised to score an own goal against its own economy--on purpose.

Legislation is moving forward in the General Assembly to opt out of the Medicaid expansion under the Affordable Care Act. The expansion would provide health insurance to people living in households with incomes below 133 percent of the poverty line. The federal government would cover 100 percent of the costs for the first three years and 90 percent of the costs thereafter.

Besides extending coverage to about 400,000 poor NC residents who wouldn't get health insurance otherwise, the expansion would bring in $40 billion on net (about $50 billion in total spending), which would jolt the economy and create jobs.

A new report by Regional Economic Models, Inc. forecasts that the expansion would add nearly 6,000 jobs to the NC economy in the first year of the expansion, as participation in Medicaid starts to grow, and 20,000 to 25,000 jobs in subsequent years, as participation stabilizes at a higher level. A figure showing the predicted job growth appears below.

Figure from REMI report "A Contrast: Modeling the Macroeconomic Impact of 'Medicaid Expansion' in North Carolina.
These are substantial numbers of jobs, especially for an economy that only managed to add 72,000 in total last year.

The REMI report indicates that nearly all of the added jobs will be in the private sector and that the spending will also add substantially to output and personal incomes.

If NC opts out of the Medicaid expansion, it will be turning its back on jobs, output and income--literally hurting its own economy.

The General Assembly should be shooting for more jobs and prosperity, along with better health and longer lives for its citizens. Instead, it is facing its own net and about to kick the ball in.