Medicaid Cuts and State Economies – No One Wins

Millions of children rely on Medicaid to keep them healthy and we are concerned that these plans by politicians in Washington DC will make it harder for them to receive the care they need.

Not only will children be harmed if these plans become law, parents will lose jobs and state economies, already fragile, could be decimated.  In the newly-released report, “Jobs At Risk: Federal Medicaid Cuts Would Harm State Economies,” Families USA explains that the proposed Medicaid cuts in the Ryan budget, in addition to taking their toll on program enrollees, would seriously harm state economies.

“Every federal Medicaid dollar that flows into a state stimulates business activity and generates jobs. The loss of federal funding means there will be fewer dollars circulating through each state’s economy, as well as fewer dollars passing from one person to another in successive rounds of spending that drive economic growth. This loss of the ‘economic multiplier effect” that states would experience as a direct result of federal Medicaid cuts would be large and much greater than the amount of the dollar cuts themselves.”

Using the RIMS II input-output model (U.S. Dept. of Commerce, Bureau of Economic Analysis) and working with the Merrick School of Business at the University of Baltimore, Families USA calculated how the proposed cuts of 5% by 2013, 15% in 2014, and approx. 33% at the end of 10 years would affect each state’s loss of business activities and jobs if they were enacted in 2011.

For example,  in 2011, a 5% cut in federal Medicaid spending would mean $13.75 billion in dollars at risk nationally (50 states plus DC); a 15% cut would result in $41.25 billion at risk, and a 33% cut would result in a whopping $90.75 billion at risk. Jobs would be lost in every state and the District, with New York, California, Texas, Pennsylvania, Florida, Ohio, Illinois, North Carolina, Michigan, and Massachusetts taking the biggest hits.

To see how your state would fare, see the state by state breakdown in the full report here

There are many other ways that the  nation’s medical bills could be reduced, while still providing health care to all citizens, other than the block grant, cost-shifting proposal advanced by Cong. Ryan. After all, many other rich democracies show much better health outcomes than the U.S., and succeed in doing so at about half the U.S’s per capita cost.

While these cuts were voted down in the United States Senate last month, we are concerned they could be added in to the debt deal being negotiated between the White House and members of Congress. They must come to an agreement on raising the debt ceiling by the end of next month.

You can fight these dangerous ideas. Click here to contact your Senators and tell them that any budget or debt deal should not cut Medicaid. They need to hear from you.