Nixon Details Positive Fiscal Impact of Expanding Medicaid
COLUMBIA - Gov. Jay Nixon today visited the Trulaske College of Business at the University of Missouri to discuss how his plan to bring billions of dollars back to Missouri through an expansion of Medicaid will benefit businesses, families, and the economy. In the first three years, the Governor's proposal would bring $5.7 billion to Missouri and provide health coverage to an additional 300,000 Missourians, at no cost to the state. The Governor was joined by the president of Columbia Regional Economic Development Inc., which has endorsed the Medicaid expansion.
"Right now, we have an opportunity to bring billions of dollars - dollars that already come out of Missourians' paychecks - back home to Missouri," Gov. Nixon said. "If we pass on this opportunity, that money will go to other states. They'll get the benefit, and we'll get the bill. I want to see those dollars go to work and help create jobs here in Missouri, and I'm glad that the business leaders at Columbia Regional Economic Development Inc. agree."
In addition to Columbia REDI, several other business and economic development organizations across Missouri have endorsed the Medicaid expansion, including the Missouri Chamber of Commerce; the chambers of commerce in Independence, Kansas City, Kirksville, Lee's Summit, Springfield, and St. Louis; the Civic Council of Greater Kansas City; the Associated Industries of Missouri; and Kirksville Regional Economic Development Inc.
"Here in Columbia and throughout Boone County, health care providers are a major part of our economy, employing thousands of area workers and generating significant economic activity," said Mike Brooks, president of Columbia REDI. "A recent study by the University of Missouri reports that 24,000 new jobs will be created in our state under the Governor's proposal to expand health coverage to working families. This means more doctors, nurses, specialists, EMTs, and lab techs would be living and working in our communities. This expansion is important to growing our economy, and we endorse this smart business decision for Missouri's future."
Last fall, a report by the University of Missouri demonstrated the clear economic benefit to Missouri of providing expanded health care coverage using the available federal funds. The University of Missouri report showed that the additional funding for health care will create 24,000 new jobs in Missouri in 2014 alone.
"This week, the Republican governors of Ohio and Michigan announced plans to take advantage of this opportunity to expand Medicaid in their states, joining Republican governors in Arizona, North Dakota, New Mexico and Nevada," Gov. Nixon said. "They are putting politics aside to make the right business decision for their states, and we should do the same here in Missouri."
Because federal funding will cover 100 percent of the costs for calendar years 2014, 2015 and 2016, expanding health care coverage to those 300,000 uninsured Missourians would involve no state tax dollars for those years. Some of these federal dollars will pay for coverage that is currently being paid for with state dollars. In addition, the economic benefit of expansion will generate additional state revenue. These savings and revenue are conservatively estimated to have a positive impact of $46.6 million in 2014, $125 million in 2015, and $139.6 million in 2016. Even as the federal funding match rate slightly declines to 90 percent, savings and revenue for the state budget will continue from $112.9 million 2017 to $4.3 million in 2021.
Under the proposed expansion, low-income Missourians who can't afford health insurance and earn less than 138 percent of the Federal Poverty Level would be eligible for coverage. A family of four living at 138 percent of the Federal Poverty Level in 2012 makes $31,809 a year.
Missouri hospitals are already required by law to treat people who have no health insurance. This results in the high cost of caring for the uninsured being passed along to employers and individuals who must pay higher premiums for their health insurance. If this coverage is not compensated for through an expansion of Medicaid to cover the cost of that care, hospitals will have to bear those costs or pass them onto patients with health insurance.
A recent report by the Missouri Hospital Association found that in 2011, Missouri hospitals provided $1.1 billion in uncompensated care to Missourians - a record level.