A 2011 study was written by the Florida Center for Fiscal and Economic Policy predicted 65,000 jobs as a result of Medicaid expansion. The author is affiliated with CHAIN, a group that advocates for the poor.
In 2009 —a year before the Affordable Care Act was signed into law —the Kaiser Commission on Medicaid and the Uninsured compiled findings from 29 studies in 23 states analyzing the role Medicaid plays in state and local economies. Kaiser found that “regardless of the economic impact model used, all studies have similar findings — Medicaid spending has a positive impact on state economies” — and that includes generating jobs.
Linda Quick, president of the South Florida Hospital and Healthcare Association, said the employment gains could be gradual and for certain types of facilities. She predicted that emergency rooms may not see immediate declines in patients, because the newly funded Medicaid patients may still end up in ERs if they can’t get in to see a primary doctor.
But Michael Tanner, a senior fellow who researches healthcare topics at the libertarian Cato institute, said the federal money for the increase comes from federal income taxes — including from Floridians.
“The money used to pay these doctors comes out of the private economy. That means those resources aren’t available in the private sector to create jobs....,” he said.
While the federal government picks up 100 percent of the cost of the expansion, it’s probably a net gain for the state, Tanner said. However, states need to be concerned about new enrollees who are currently eligible but haven’t signed up —for those folks, the state has to pay under the old arrangement. And, the federal government will eventually phase down its contribution for the expanded program.
“I hesitate to say it will create no new jobs, but I’m suspicious of studies that say it will create x new jobs on other side,” he said. “There are so many moving parts, and we don’t know how it will play out.”
Finally, we interviewed Chris Lafakis, a senior economist at Moody’s who examines Florida’s economy, and sent him our findings from those who predicted job gains and losses. We should note Moody’s is a financial analysis firm that doesn’t have a position on the healthcare law.
Lafakis said, based on Moody’s previous analysis, if all states opted in to the expansion (and they haven’t), the country would add 270,000 jobs over 10 years — including 10,000 to 30,000 in Florida.
The increase in jobs are a result of two main factors:
The higher coverage rates will encourage those who would otherwise not have insurance to visit doctors, boosting healthcare demand. Higher coverage rates will result in hospitals getting paid for more patients, allowing hospitals to hire and invest.
The federal government is estimated to spend an additional $48 billion in Florida if it opts in.
“That is money that will be pumped into the economy, with the conduit being the poorest people that have the highest spending rates. Florida will also spend more money than it otherwise would to provide Medicaid for its poorer residents,” Lafakis said. “This will free up low-income consumers to use their money on other goods and services [food, gasoline, entertainment].”
In a state the size of Florida, 10,000-30,000 jobs “is pretty small in the grand scheme of things,” Lafakis said. “But still, a Medicaid opt-in would help hospitals financially, boost state and federal spending and channel those funds to citizens with high spending rates.”