Medicaid expansion will add 40,000 jobs, create $30B in economic impact through 2021, first-year analysis shows

02/12/2015 04:35 PM

FRANKFORT — Gov. Steve Beshear’s decision to expand Medicaid eligibility will create some 40,000 jobs and add an estimated $30 billion to the state’s economy through fiscal year 2021, Beshear announced at a news conference Thursday.

Beshear unveiled a study, commissioned by the Cabinet for Health and Family Services and completed by Deloitte Consulting and the University of Louisville Urban Studies Institute, on the state’s experience in the first year of expanded Medicaid under the Affordable Care Act.

Deloitte and UofL found the state added nearly as many jobs in 2014 due to Medicaid expansion, more than 12,000, as a 2013 report predicted would be created by 2021, almost 17,000.

The Democratic governor said Deloitte and UofL’s study buried any worries that the state could not afford to expand its Medicaid program “under an avalanche of facts.”

“An avalanche of facts that demonstrate to the satisfaction of anyone and everyone with an open mind that Kentucky can indeed afford to take care of its people,” Beshear said. “In fact, we can’t afford not to do so.”

The report found the state would pay an estimated $247.6 million in the 2017-18 biennium to cover the newly eligible Medicaid recipients, but those costs would be offset by $511.8 million in anticipated savings as the state begins to pay for the expanded population.

The federal government is currently paying the full tab for Medicaid expansion, eventually ratcheting down to 90 percent with the state picking up the remaining 10 percent of costs. Kentucky pays 30 percent of traditional Medicaid costs.

Beshear said the revised estimates are greater than initial economic projections he cited in his decision to embrace Medicaid expansion, which has added about 375,000 new Medicaid recipients and another 17,000 who were previously eligible for the program.

The figures come with Kentucky’s executive branch in flux as Beshear prepares to leave office at the end of his second consecutive term in December. Only one prominent Democrat, Attorney General Jack Conway, is seeking the office while a crowded GOP field — Agriculture Commissioner James Comer, former Louisville Metro Council member Hal Heiner, Louisville businessman Hal Heiner and former Kentucky Supreme Court Justice Will T. Scott — will narrow to one after the May 19 Republican primary.

Beshear offered a challenge to gubernatorial candidates who may have their sights set on rolling back his executive orders pertaining to the federal healthcare law’s provisions on Medicaid expansion and establishing the state-based health exchange kynect, saying everyone should embrace affordable health coverage for those in need.

“I hope you in the news media this year when you are interviewing and questioning all of the candidates for governor on both sides of the aisle that if they start making these wild statements about how bad this is, at least you have the facts here and they need to address the facts,” Beshear said. “It’s one thing just not to like it because the president has his name on it, and if that’s the reason that they want to take healthcare away from 500,000 Kentuckians, then that’s their opinion and people ought to know that.

“But where we are today is that we have answered the questions, number one, will it work, because it’s working in Kentucky, and number two, can we afford it, and yes we can.”

Since the expansion, medical providers have received nearly $1.2 billion in revenue from new Medicaid recipients, Beshear said.

Cities and counties will also see an estimated $819.6 million net gain through fiscal year 2021 from the expansion due to increased tax revenues, Medicaid costs transferred to the federal government and anticipated health improvements for Kentuckians, among other factors, he said.

The overall gains in healthiness will prove key for future economic development, the governor said.

“The fact that for the first time in our history they can go to the doctor and stay healthy and they can take their kids and stay healthy, and the long-term impact of that is immeasurable because when you’ve got a healthy group of people here, you’ve got a healthy workforce,” Beshear said.

“You’ve got a healthy workforce, you’ve got a productive workforce. When you’ve got a productive workforce, you’re going to attract all kinds of businesses and jobs to this state.”

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.

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