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Medicaid Expansion Would Generate New Jobs And Tax Revenue For Missouri, New Study Shows

Alex Smith
Missouri hospitals have been among the strongest advocates for expanding Medicaid.

The report concludes that expanding the program in Missouri would create tens of thousands of jobs. "We don’t see how the state can’t afford to expand Medicaid," one researcher said.

Despite being approved by voters as a constitutional amendment, Medicaid expansion hit a wall in Missouri after Republican lawmakers refused to fund it, insisting it would cost the state too much money.

However, a new report projects that expanding the program largely through federal funding would be an economic boon, creating tens of thousands of new jobs and millions in additional tax revenue. New federal incentives would also reduce the state’s Medicaid costs even further than previous studies have shown.

Study author Leighton Ku, a health policy researcher at George Washington University, says that Missouri expansion opponents’ claims are refuted by the report, which was released on Thursday by the Commonwealth Fund, a private health care advocacy foundation.

“I think the argument, and particularly given the terms of the American Rescue Plan, is we don’t see how the state can’t afford to expand Medicaid, in addition to one of the obvious things, that it will help improve the number of people who have insurance coverage,” Ku told KCUR.

Expanding Medicaid coverage in Missouri to individuals with incomes up to 138% of the federal poverty level would increase enrollment by 398 thousand residents, according to the study.

Missouri would gain 50,100 new jobs and gain an additional $86 million dollars in local and state tax revenue in 2022, according to the study, which examined the financial effects of expanding Medicaid in 14 states that have not done so.

Only about half of the jobs created would be in health care. Jobs in construction, retail, finance and insurance industries would also increase.

The state would also receive an additional $656 million in 2022 from the federal government as an additional incentive for expanded Medicaid, which was created as part of the American Rescue Plan. In addition to paying for 90% of the state’s costs for expansion, the new incentive provides an additional 5% increase in the federal government’s funding to the state for traditional Medicaid spending during the first two years of expansion.

Kansas would gain 22,900 new jobs and see an increase in tax revenue of $49 million in 2022 under expansion that would provide health care coverage for an additional 145 thousand residents, the study estimated.

Studies by researchers at Washington University in St. Louis have shown that expanding Medicaid to include Missouri residents with incomes up to 138% of the federal poverty level would save the state money in most scenarios by reducing the need for other health care spending.

The Missouri studies have been dismissed by Republican state lawmakers as flawed or biased, but Ku explains that research on Medicaid expansion in other state has also repeatedly shown similar positive economic effects.

“There have been lots of studies, and I say hundreds - I literally mean hundreds – since the Medicaid expansions began in other states that have examined what’s the effect of the Medicaid expansions,” Ku said. “The results are consistently positive.”

As a health care reporter, I aim to empower my audience to take steps to improve health care and make informed decisions as consumers and voters. I tell human stories augmented with research and data to explain how our health care system works and sometimes fails us. Email me at alexs@kcur.org.
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