Expanding Medicaid in All States Would Add 1 Million New Jobs

Expanding Medicaid eligibility under the American Rescue Plan in the 14 remaining states that have not yet done so would lead to the creation of more than 1 million jobs nationwide, with the largest gains in Texas, Florida, North Carolina, Georgia, and Missouri, according to a new report from the Commonwealth Fund and researchers at George Washington University’s Milken Institute School of Public Health.

“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. The economic and social benefits of Medicaid expansion are immense and would ripple through the broader U.S. economy,” says Leighton Ku, PhD, director of the Center for Health Policy Research at George Washington University’s Milken Institute School of Public Health and lead author of the report.

The plan increases federal funding for states that adopt the Affordable Care Act’s Medicaid expansion by paying 90% of the cost of covering newly eligible adults, with an additional 5-percentage-point “bonus” federal match on existing state Medicaid expenditures for two years. As of May 2021, 14 states — Alabama, Florida, Georgia, Kansas, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming — still have not expanded the program. Missouri and Oklahoma have passed ballot initiatives to begin expansions, but it is unclear if Missouri will move forward.

The report, “The Economic and Employment Effects of Medicaid Expansions Under the American Rescue Plan,” estimates the health, economic, and employment gains from 2022 through 2025 for all 14 states, and the nation overall, if they adopt Medicaid expansions.

Key findings include:

• Health Insurance Gains: Medicaid expansion in all 14 states would lead to 4.45 million fewer people uninsured and an increase in Medicaid program enrollment 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).

• Higher State and Local Tax Revenues: Expanding Medicaid would increase federal revenue to the 14 states by $49 billion in 2022 and lead to higher state and local tax revenues.

• Job Growth and Stronger State Economies: If the 14 states expand Medicaid, over the years 2022 to 2025 total economic activity will grow by more than $600 billion and personal incomes will grow by $218 billion in these states.

David Blumenthal, MD, president of the Commonwealth Fund notes, “States that have elected not to expand Medicaid are leaving millions of the poorest people in the country without access to affordable health insurance. The American Rescue Plan is a fresh opportunity not only to finally extend coverage to more than 4 million people ,but also to promote job and economic growth in the wake of one of the deepest recessions in generations.”