Day 32 – Medicaid at 50: Jobs and the economy

Over the coming weeks this blog will highlight a key feature of Medicaid and the individual states that administer Medicaid and CHIP leading up to the program’s 50th anniversary (July 30th). Hopefully, you’ll learn some interesting facts about Medicaid and each of the 51 state programs.

We’ve mentioned the FMAP and how Medicaid spending can act as an economic stimulus, and now we’ll take a closer look at what that means. This study analyzed the stimulating effects of the ARRA’s FMAP boost. The authors found that marginal increase of $100,000 resulted in 3.8 job-years, of which 3.2 job-years were outside government, health, and education. Another interesting thing about this paper is how they discuss and grapple with the challenges of evaluating extant social programs, where it can be hard to tease apart all the relationships between your different variables.

It wouldn’t be that surprising to find that Medicaid contributes to health care jobs, but it’s quite interesting to see how much of an effect Medicaid seems to have on non-health jobs. This Kaiser Family Foundation report provides a great overview of Medicaid expansion in terms of the economic effects, and summarizes model projections at the state level, so you can look at projected economic impact and jobs state-by-state. The politics of Medicaid can be very contentious, and many argue that the economic benefits of Medicaid are overstated, but a preponderance of evidence points to a positive relationship (of some magnitude) between Medicaid spending and economic growth.


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