The Dollars and Sense of Medicaid Expansion – Series #1

The MCC has started a series on the Dollars and Sense of Medicaid Expansion, drawing from a new report– The Economic Impacts of Medicaid Expansion on Missouri — prepared by the University of Missouri School of Medicine in conjunction with Dobson DaVanzo & Associates, LLC, Vienna, VA.

The State of Missouri faces a decision about whether to opt into a Medicaid expansion offered under the Patient Protection and Affordable Care Act (ACA). States can beginĀ  to opt into the expansion in January of 2014. Debate over whether to expand Medicaid will be a key issue in the 2013 session of the Missouri General Assembly.

The University of Missouri report uses a professional analysis tool called IMPLAN 3.0 to measure the economic impact in Missouri of the infusion of new federal dollars from the Medicaid Expansion. The economic impact includes not only direct effects, such as the creation of new jobs at health clinics and hospitals, but also indirect effects, such as new employment generated by businesses that supply material or supplies to health care facilities, and induced effects from increased retail sales generated due to the creation of the new jobs.

The executive summary offers these key findings:

  • The Medicaid expansion will “generate an additional 24,008 jobs in Missouri in 2014.”
  • “Labor income in the state is projected to increase by nearly $7 billion during the period 2014 to 2020.”
  • “The total effects (direct, indirect and induced) of the original $856 billion in Medicaid expansion is an additional $9.6 billion of value-added output to the state.”
  • “The Medicaid expansion will generate $856 million in additional state and local taxes from 2014 to 2020 and $1.4 billion in federal taxes due to the increase in jobs and economic activity, for a total tax collected of $2.3 billion.”

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