Medicaid Expansion a Fiscal Winner for Nebraska

The Center for Rural Affairs released the third and final Rural Policy Brief examining the basic economic and income issues for all Nebraskans connected to expanding Medicaid. The brief is part of a series examining findings of the University of Nebraska at Kearney report on the implications of LB 472 and their significance to rural and small town Nebraska.

Evidence shows that states that have expanded Medicaid have witnessed substantially faster growth in healthcare jobs than those states that have not expanded. Medicaid expansion will support 10,779 jobs in Nebraska in FY 2019-20. And Nebraska has already foregone half a billion federal dollars because of inaction on Medicaid expansion. The bottom line is… Medicaid expansion is a fiscal winner in Nebraska.

John Crabtree, Center for Rural Affairs

To view or download a copy of the Center’s Policy Brief go to:

http://www.cfra.org/bottom-line-medicaid-expansion-ne

On April 1, 2015, Dr. Allan Jenkins, Professor of Economics at the University of Nebraska at Kearney, and Dr. Ron Konecny, Professor of Management at the University of Nebraska at Kearney, released Nebraska Medicaid Expansion: Protecting a Critical Infrastructure, Supporting Main Street, Improving Worker Health and Productivity (the UNK Report). The UNK Report is an extensive benefit-cost analysis of several factors that should be considered in the debate on LB 472, the Medicaid Redesign Act, and Medicaid expansion in Nebraska.

“The UNK Report finds that Medicaid expansion will support 10,779 jobs in Nebraska in FY 2019-20,”  explained John Crabtree of the Center for Rural Affairs. “This is crucial in lower income areas of the state, including rural Nebraska, where Medicaid expansion would have a larger effect and where jobs, particularly well-paying healthcare jobs, are needed.”

According to analysis of the UNK report by Jon Bailey, the Center for Rural Affairs’ former Director of Rural Policy, Kentucky, one of the most aggressive states in their Medicaid expansion program, found that by 2021 the number of new jobs created as a result of expansion is expected to grow to approximately 40,000, with an average salary of $41,000. In comparison, the UNK Report finds jobs created as a result of Medicaid expansion in Nebraska will have an average salary of $44,845 in FY 2019-20.

The UNK Report also found that Medicaid expansion is a significantly more cost-effective state policy approach that also creates employment. For example, the UNK Report compares Medicaid expansion (through LB 472) with the Nebraska Advantage Act’s per job cost amount. The Nebraska Department of Revenue estimated that the Nebraska Advantage Act cost from $42,747 to $234,568 per job created. In comparison, the model used in the UNK Report finds that each $46,572 increase in Medicaid spending creates one job – about 20 percent of the largest Nebraska Advantage Act cost per job figure.

According to Crabtree, the UNK Report definitively settles one of the major opposition points to Medicaid expansion, namely that it would eventually cost the state too much in General Fund expenditures, particularly when the federal cost share for expansion declines to 90 percent in 2020 and thereafter.

“Medicaid expansion in Nebraska would bring about $69.3 million in General Fund savings for the five year period in programs already funded through the state’s General Fund, and which would no longer be necessary if Medicaid were expanded,” said Crabtree

“As we have pointed out in previous policy briefs, the UNK report contains a solid and rigorous benefit-cost analysis, showing the multiple benefits to Nebraska’s economy, its communities, and to individuals and families,” concluded Crabtree. “And Nebraska taxpayers have already watched half a billion dollars of federal support for Medicaid expansion slip away because of the Unicameral’s inaction. For the sake of over 77,000 Nebraskans  who fall into the Medicaid Gap, and for all Nebraska taxpayers, policymakers must act on expanding the state’s Medicaid program.”

Check out the Center’s counter on Medicaid dollars lost to Nebraska taxpayers at:

http://www.cfra.org/news/150305/nebraska-medicaid-losses-top-400-million