Key Quote: Kansas could add nearly 23,000 new jobs if the state expanded Medicaid, according to a new report on the economic and employment effects of expansion in states that have not adopted it… If Kansas were to expand Medicaid, from 2022 to 2025 the state’s economic output would rise $17 billion, the report said. Personal income in Kansas could also rise by $6.3 billion in those three years, particularly because of increased employment, according to the report.
May 20, 2021
Kansas could add nearly 23,000 new jobs if the state expanded Medicaid, according to a new report on the economic and employment effects of expansion in states that have not adopted it.
While most of the new jobs would go to the health care sector, expansion would also create positions in retail, construction and other fields.
Those are some of the findings of the report, released Thursday from The Commonwealth Fund and George Washington University’s Milken Institute School of Public Health. (The Commonwealth Fund is a foundation that aims to support the health care system and improve access.)
“Medicaid expansion will fuel stronger state economies because of the inflow of federal funding,” the report’s authors wrote. “These benefits do not include other possible effects, such as greater productivity because of better health.”
Overall, the report estimated 11,900 new jobs in health care, 2,400 in retail, 1,600 in construction, 700 jobs in finance and insurance and another 6,300 new jobs in other sectors across Kansas.
Generally, the job creation would stem from the additional federal money flowing into states to fuel growth, according to the report.
The increased funding would go to health care providers and get passed on in the form of worker pay and vendor purchases. That could translate into consumer spending and eventually, state and local tax revenue.
To conduct the study, researchers looked at estimates of how many people would enroll in Medicaid if state governments expanded the programs. Taking into account new federal money and other budgetary changes, they used an economic model to estimate how the added funding would impact state economies and job growth in the aftermath of the COVID-19 pandemic.
HOW EXPANSION WORKS
Including Kansas, 14 states have not expanded Medicaid. Under the Affordable Care Act, the federal government would cover 90% of the cost of expansion, with the state picking up the tab for the rest.
In neighboring Missouri and Oklahoma — included in the 14 states in the report — voters passed ballot initiatives to expand Medicaid, but haven’t implemented it yet. Expansion in Missouri is uncertain after the state Legislature blocked funding for it. Wisconsin has a partial expansion covering adults up to 100% of poverty.
The state share of Medicaid expansion costs for Kansas would come in around $149 million in 2022, the report estimated. Kansas could gain about $49 million in state and local tax revenue.
Additional federal funding for expansion was passed this year.
The American Rescue Plan, also known as the COVID relief bill, was signed in March. It also encourages states to expand Medicaid to cover adults up to age 65 with incomes at or below 138% of the federal poverty level, which is $30,305 for a family of three in 2021.
The economic stimulus bill offers states bonus federal funding to expand Medicaid, looking to chip in more toward some of a state’s matching costs.
In Kansas, Gov. Laura Kelly has pushed to expand Medicaid. Opponents often say expansion is too expensive, while proponents say the state is losing out on federal funds and leaving too many residents uninsured.
State lawmakers quickly turned down a proposal for Medicaid expansion earlier this year. A bipartisan effort to pass it also died last year.
Nearly half of the uninsured population across the U.S. lives in one of the 14 states that have not expanded access to Medicaid or loosened eligibility levels, according to the report.
The report estimated there were about 262,000 uninsured Kansans in 2019. If the state expanded coverage in 2022, about 145,000 more Kansans could enroll in Medicaid coverage.
JOBS AND ECONOMIC RECOVERY
If all 14 states expanded Medicaid by 2022, the report predicts more than 1 million new jobs across the country next year.
Kansas wouldn’t stand to gain as many jobs as other, more populated states such as Texas, Georgia and Missouri. However, it could create about 1,200 more jobs than similarly-populated Mississippi and almost 2,000 more than jobs than Wisconsin, which has already partially expanded Medicaid.
The report also estimated how economic output would change in states.
If Kansas were to expand Medicaid, from 2022 to 2025 the state’s economic output would rise $17 billion, the report said. Personal income in Kansas could also rise by $6.3 billion in those three years, particularly because of increased employment, according to the report.
Even if Kansas doesn’t expand Medicaid, it could feel the economic impacts of neighboring states’ expansion. For example, expansion in Texas would be felt in other states that do business with Texas.
“Medicaid expansion in the 14 remaining states, spurred by new funding in the American Rescue Plan, can help these states and the rest of the nation recover from the recession and harm triggered by the COVID-19 pandemic,” the report found.