STUDY: Medicaid Expansion Would Save Arizona $1.2 Billion And Create Over 20,000 Jobs

A report from the non-partisan Grand Canyon Institute suggests that if Arizona Gov. Jan Brewer (R) rejects Obamacare’s expansion of the Medicaid program, it could take a toll on more than just the low-income residents of her state who struggle to afford health coverage — in fact, it could also cost Arizona potential savings and new jobs.

According to the nonprofit research institute’s estimates, expanding the Medicaid program could help save Arizona $1.2 billion and create over 20,000 jobs in the state over the next four years. In light of their findings, researchers at the nonprofit institute strongly recommended that Arizona accept the Medicaid expansion under President Obama’s health reform law:

The report’s author, Dave Wells, the Grand Canyon Institute’s Research Director, noted that “by increasing Medicaid coverage to 133 percent of the federal poverty line, the state would reap huge economic benefits. Compared to current policy, it would add 21,000 jobs compared to 15,000 jobs created by following 100 percent of the federal poverty line. The 21,000 jobs would reduce the state’s unemployment rate by 0.7 percent, and increase economic growth in the state during the first year of full implementation by nearly 1 percent.” […]

George Cunningham, chair of the Grand Canyon Institute, explained, “The payback on the state investment in expanding Medicaid to 133 percent of the federal poverty line is 5 to 1; more than $5 will come into Arizona from the Federal government for every dollar Arizona expends. You can’t beat that return on investment.

The study points out that by expanding Medicaid and qualifying for higher federal matching funds over the first four years of its implementation, Arizona could save $1.2 billion from the state’s general fund. Although the state would be expending more money to cover additional low-income residents, the influx of federal funds would exceed that expense. The study’s authors also used economic software to simulate the effects of three options for the state — accepting the Medicaid expansion, rejecting the expansion to continue the state’s current Medicaid policies, and continuing an amended state Medicaid policy that Arizona enacted in the midst of a recent budget crisis — and found that expanding Medicaid would impact other sectors of the state’s economy and help the state add thousands of new jobs.

Other researchers have also documented the potential cost-saving effects of expanding Medicaid in Nebraska, Oklahoma, and Arkansas. Hospital officials have also spoken out in favor of the proposed expansion, saying their hospitals could stand to lose millions if governors choose to reject the Medicaid expansion. However, despite the potential positive results in store for states that choose to expand the Medicaid program under Obamacare, some GOP governors continue to stand in the way. Republican governors in states including Florida, Mississippi, Texas, Wisconsin, South Carolina, and Louisiana have pledged to refuse the Medicaid expansion. Brewer has not publicly taken a position yet, saying she will wait to decide until after the November election.