GOP’s Medicaid Cuts Would Kill Jobs

A trio of reports from Families USA argue that the consequences of adopting the House GOP budget and transforming Medicaid into a block grant program go beyond coverage erosion for the most vulnerable; the policy would also lead to substantial job loss. As Ron Pollack, the group’s director, explains, “Every federal Medicaid dollar that flows into a state stimulates business activity and generates jobs. Conversely, cutting Medicaid funds not only hurts seniors, people with disabilities, and children who count on this program as their lifeline, but also results in fewer jobs”:

The budget proposal adopted by the U.S. House of Representatives, sponsored by Rep. Paul Ryan (R-WI), calls for cuts in federal funding to current state Medicaid programs of 5 percent in 2013, 15 percent in 2014, and 33 percent in 2021.

The report looks at the economic impact of a 5 percent, 15 percent, and 33 percent cut in current Medicaid funding levels. Implementing a 5 percent cut in Medicaid spending in 2011 would:

– Cost Florida more than $566.1 million in federal Medicaid dollars and put at risk more than $1.2 billion in business activity and 11,320 jobs;


– Cost Florida and the remaining 49 states and the District of Columbia the $13.75 billion needed to support health care for vulnerable residents, including funding for nursing home care and other long-term care for seniors and people with disabilities.

Indeed, for all the GOP’s groaning about increasing Medicaid costs, additional federal dollars help spur job creation in the health care industry and other related service sectors. Growth in the health care industry is already driving job growth, and that trend is expected to continue as the health care law expands coverage and invests directly in local community clinics. According to one estimate, health care reform could create as many as 250,000 to 400,000 jobs a year over 10 years.

Click to see Families’ three separate analysis for how block granting would effect Florida, Colorado, and New Mexico.