This Week, Protect Our Care Highlights the Economic Benefits of Medicaid As Part of the “Hands Off Medicaid” Campaign
Medicaid currently serves over 72 million people, that’s one in five Americans. As an essential pillar of our health care system, Medicaid covers seniors in nursing homes, children, people with disabilities, and working people who don’t receive health insurance through their employer. Yet, Trump and his Republicans allies are waging a relentless attack on Medicaid, aiming to cut almost $880 billion in Medicaid funding to pay for tax breaks for the ultra-wealthy and large corporations. From reducing poverty levels and inequality to creating more jobs, Medicaid has served as a bedrock of economic growth and development since its introduction. These Republican cuts will gut one of America’s largest health care insurers, leaving small businesses, working families, seniors, rural hospitals, and Americans across the country to suffer the consequences.
The Republican plan for Medicaid prioritizes billionaires over working families and the most vulnerable Americans. These Medicaid cuts alone will slash the income of the bottom fifth of the country by 7.4 percent, and the second fifth by 1.7 percent, meaning over 136 million Americans will have less money, less access to care, and less economic opportunity, all so Republicans can make the rich richer and poor poorer.
Protect Our Care is continuing its “Hands Off Medicaid” campaign with theme weeks to underscore the importance of Medicaid across the country. Alongside partners, lawmakers, and other advocates, Protect Our Care is working to defend Medicaid from the Republican-led plan to slash funding to pay for another round of tax cuts for the wealthy and big corporations. This week aims to highlight the economic impacts of the Medicaid program in communities around the country. Read more here.
Medicaid Reduces Personal Debt and Prevents Working Americans from Declaring Bankruptcy. Medicaid enrollees have been found to have significantly lower medical debt with around a $3.4 billion difference in just the first two years of Medicaid expansion’s existence, as well as better credit terms worth $520 million per year of enrollment. A 2020 study of around 5 million credit reports found that medical debt has decreased by 12 percent in Medicaid expansion states compared to only 1 percent in non-expansion states, reducing medical debt by $5.89 billion over just two years. Studies estimate that approximately 50 percent of the decline in Chapter 7 bankruptcy rates between 2014-2018 can directly attributed to people gaining Medicaid expansion coverage. Other studies show a 10 percentage point increase in Medicaid eligibility is associated with an 8 percent reduction in personal bankruptcies. This doesn’t stop at debt though: the bottom 10th percentile of earners in Medicaid expansion states have seen a 22.4 percent boost in their income, compared to only 11.4 percent in non-expansion states and Medicaid expansion has been shown to directly contribute to fewer evictions. Other research has found that Medicaid expansion also caused a “significant” reduction in poverty.
Medicaid Secures, Protects, and Provides Opportunities For Our Future Generations. Approximately 31.5 million children in the United States are enrolled in Medicaid, that’s around 40 percent of all enrollees. In 2021, the child uninsured rate was 8.3 percent in states which refused to expand Medicaid, compared to only 4.6 percent in states that adopted expansion. If holdout states expanded Medicaid, the number of uninsured children would drop by 7.3 percent. Medicaid eligibility during childhood lowers the high school dropout rate, raises college enrollment, and increases four-year college attainment. Medicaid also has a positive impact on children’s employment opportunities later in life. For each additional year of Medicaid eligibility as a child, adults by age 28 had higher earnings and made $533 additional cumulative tax payments due to their higher incomes. One 2020 report found that children who received health insurance through Medicaid were less likely to die young, more likely to be employed in their adult life, and less likely to develop a disability as an adult. This corroborates multiple other studies showing Medicaid pays for itself with children becoming higher tax-paying citizens who are less likely to be incarcerated and less likely to have chronic illnesses developed in childhood. Simply put, expanding Medicaid for children led to an 80 percent return to the government in the long run.
Medicaid Reduces Uncompensated Care Costs for Hospitals, Allowing Them to Remain Open, Maintain Good Jobs, and Provide Quality Care. Medicaid is essential in preventing hospitals from taking on unbearable financial loss associated with treating uninsured individuals. On average, uninsured people cost a hospital around $800 each. In 2012 alone, prior to the ACA coverage expansions, hospitals in the U.S. provided over $46 billion in uncompensated care. In an era where hospital closures predominately affect disadvantaged communities, this is spending that can’t be maintained. After 2014, hospital uncompensated care expenditures fell significantly in Medicaid expansion states, though not in non-expansion states; one study showed that uncompensated care fell by $2.8 million and Medicaid revenue rose by $3.2 million per hospital annually in states which adopted Medicaid expansion. As well, Medicaid is a lifeline for older Americans with around 6 in 10 nursing home residents relying on continuing funding.
Medicaid Strengthens Rural Economies. Medicaid expansion does more than provide vital health coverage to more Americans, it is also one of the pillars in maintaining thriving rural economies. For rural areas that often have high unemployment rates, hospitals contribute significantly to local economies by employing large numbers of people with relatively high-paying jobs. Medicaid helps fund rural hospitals, which employ 10 percent of all employees in rural counties. When rural hospitals close, communities can lose a staggering number of jobs, both within and outside of the health care sector. The closure of one rural hospital can eliminate 220 jobs immediately. A 2016 analysis identified 673 rural hospitals at risk of closing and estimated that if those hospitals shut down, 99,000 health care jobs in rural communities would be lost. Over 75 percent of all rural hospital closures from 2010 to 2021 occurred in states that had not adopted Medicaid expansion. Rural hospitals in Medicaid expansion states are 62 percent less likely to close. Over 700 rural hospitals — one-third of all rural hospitals in the country — are currently at risk of closure, hundreds of which are in non-expansion states.
Republican Efforts to Prevent Expanding Medicaid Have Led to Fewer Jobs and Weaker Economies. Republicans in South Carolina have staunchly refused to expand Medicaid to over 345,000 people. This has left over 180,000 South Carolinians in an insurance coverage gap that prevents them from accessing life-saving health care. The battle against Medicaid expansion has also continued to stifle the economic growth of South Carolina, with some projections showing that adopting expansion will produce a 9:1 statewide economic return on investment in the program. The Republican opposition to Medicaid expansion in Tennessee has meant that over $20 billion in potential funding to the state has been forfeited since 2014. Around 194,000 people would be eligible for low-cost health coverage if expansion was adopted and over 15,000 new jobs would be created in Tennessee. Meanwhile, reports from Ohio and Michigan found that Medicaid expansion helped enrollees retain employment or effectively look for work. Relatedly, a study from the University of Kansas found that people with disabilities are much more likely to be employed in states that have expanded Medicaid coverage
Republican Cuts To Medicaid Will Gouge State Budgets. Republican plans will create at least a $50 billion hole in state Medicaid budgets to pay for tax breaks for the wealthy and corporations. States rely on federal funding to provide crucial services such as nursing home care, prescription drug coverage, and complex care for children with disabilities. Most states rely on provider taxes to receive this crucial federal funding, but Republicans in Congress are threatening to prohibit states from using this critical source of funds at a time states are already facing immense budget pressure and fiscal uncertainty from a number of factors including expiring pandemic-era funding, increasing health care costs, new high-cost prescription drugs, and workforce challenges. Republican proposals will only increase this uncertainty and undercut states’ ability to continue to provide these crucial services to hardworking Americans.
