We already know that Republicans are more or less liars at this point whenever they say something is bad for the economy (I still don’t get why people continue to fall for the myth that they’re better for overall economic wealth, but whatever) and have a moral opposition to saving the country money if it also helps poor people.
That’s why I am glad someone took the time to really crunch the numbers about one of the biggest myths about the Affordable Care Act: that Medicaid expansion costs too much money. The University of Michigan and Commonwealth Fund joined forces to look at the economic impact of the Medicaid expansion in Michigan state and results are in: the Medicaid expansion saved the state money and created jobs.
If you’re not a nerd like me who enjoys reading academic research articles in their free time, you might want some free takeaways. Here’s what I find most interesting:
The expansion created about 30,000 new jobs each year. The Detroit Free Press reports:
“[T]he Medicaid expansion has resulted in the creation of an estimated 30,000 jobs each year – many in the health industry and other private sector jobs – bringing in $150 million a year in revenues to the state from income and sales taxes.”
The number of enrollees surpassed Michigan’s expectations by more than 40 percent. Yet the state still has been saving millions of dollars. It shows that even local governments have underestimated how many of their constituents need this.
The expansion helped spur state income without raising taxes on residents. Part of the terms of the ACA are that the feds pick up most of the bill for states and slowly wean them off, but the savings isn’t simply due to the feds paying for so much of it. The expansion allowed residents to have more money to spend and thus helped state income. The authors of “Economic Effects of Medicaid Expansion in Michigan” note:
“Medicaid expansion does not simply shift spending by state governments or residents to the federal government, but actually increases total spending in the state without a commensurate tax increase for state residents. This increase in economic activity benefits state residents directly through increased employment in health care and a multiplier effect of related spending and employment in other sectors of the state economy, such as construction and retail services, with corresponding increases in tax revenue.”
The expansion would save Michigan $432 million in this year alone. That’s if the ACA isn’t repealed. Now those savings are probably going to disappear. The Commonwealth Fund’s site explains:
After accounting for the $20 million annual expense of administering the program, savings accruing from reduced state spending on mental health and correctional health services ($235 million) and state taxes and contributions from health plans and hospitals (up to $200 million) would cover Michigan’s share of the program through 2021 and likely beyond. In fact, these savings would produce a net surplus, ranging from $432 million in 2017 to $162 million in 2021.
Experts believe the savings in other states who adopted the expansion likely have similar numbers. This means that if the Republicans get their way with the ACA we won’t just see the human cost of these backward steps, we’ll suffer the great financial costs as well. But I guess Trump and his billionaire friends deserve the tax breaks more than poor people deserve health care.
You can read the full study in The New England Journal of Medicine here.