Press release
February 26, 2013

Report: Expanding Medicaid Would Give a Boost to Louisiana’s Economy

Influx of Medicaid Dollars Would Spur Job Creation, Economic Activity

Washington, D.C. — A report released today says that accepting federal dollars to expand Louisiana’s Medicaid program would not only bring access to affordable health care to 422,000 Louisianans, but it would also support approximately 15,600 new jobs in 2016 across the spectrum of the state’s economy.

The report, released by the Louisiana Consumer Healthcare Coalition and the national consumer advocacy organization Families USA, spotlights a wide range of health care and economic benefits that Louisiana would experience by participating in the Affordable Care Act’s Medicaid expansion.

The report is based on the general guidelines for Medicaid expansion under the reform law: While the federal government now pays about 61 percent of the cost of the current Medicaid program, it will pay all the costs of expanded coverage the first three years of the program, 2014 to 2016, and its share will then only decrease to 90 percent by 2020. In 2016, an estimated additional $1.1 billion in Medicaid dollars would be spent on health care in Louisiana.

The Medicaid "expansion," as it is termed, is actually a national standardization of eligibility, raising the qualifying income level to 138 percent of the federal poverty level and making single individuals or couples without children eligible for Medicaid in states where they did not otherwise qualify.

With Louisiana dealing with an unemployment rate of 5.5 percent in December 2012, a gain of 15,600 new jobs in 2016 is just one of many benefits to the state. The Medicaid expansion would also do the following:

  • Increase economic activity. The increased federal funding and jobs created are projected to increase economic activity in Louisiana by nearly $1.8 billion in 2016.
  • Reduce state spending on state-funded health care programs for the uninsured. Currently, states and localities pay for about 30 percent of the cost of uncompensated care. A recent study by the Kaiser Family Foundation estimates that Louisiana could save $267 million in uncompensated care costs from 2013 to 2022.
  • Strengthen the state’s health care system. The American Hospital Association says that U.S. hospitals absorbed $41.1 billion in costs in 2011 for providing charity care to the uninsured. Increasing the number of residents receiving Medicaid would reduce those costs, strengthening the health care system for everyone in the state.
  • Reduce costs from uncompensated care that are passed on to consumers and businesses. Some of the costs of uncompensated care are also passed along to insurance companies, which in turn raise premiums for businesses and families. In 2008, Families USA calculated that uncompensated care increased family health insurance premiums by an estimated $1,017. By reducing the number of Louisianans without insurance, those cost shifts can be reduced.
  • Increase state revenue. Although tax structures vary from state to state, increasing jobs and business activity generally means more sales tax revenue for states or localities, and more jobs and better-paying jobs also contribute to state income. This increase could help offset the state’s own cost for a Medicaid expansion.
  • Help Louisianans become healthier and more productive. Hundreds of thousands of Louisianans will now have access to affordable health coverage, an essential step to healthier lives and a gain for Louisiana.

"The Medicaid expansion is a win-win-win proposition for the people of Louisiana," Ron Pollack, Executive Director of Families USA, said today. "It would reduce the number of people who can’t afford health care, it will increase the number of jobs throughout the state, and it will strengthen the state’s economy."

"The bottom line is that the Medicaid expansion will benefit our state's budget," Senator Mary Landrieu (D-LA) said today. "Billions of dollars would flow through our economy, providing a great boost to our hospitals and other medical providers, as well as the businesses and suppliers that work with them. This would support approximately 15,600 new jobs and increase economic activity in the state by $1.8 billion. The expansion could also cover approximately 422,000 people in our state who currently lack health insurance, supporting a healthier and more productive workforce. Expanding Medicaid is the right thing to do for Louisiana's economy, budget, and our people."

"This report shows that federal funds from Medicaid expansion will benefit every local economy in Louisiana," Moriba Karamoko, Director of Louisiana Consumer Healthcare Coalition, said today. "In fact, Dr. James A. Richardson of Louisiana State University reached a similar conclusion in a 2011 study commissioned by the Louisiana Hospital Association. Expanding Medicaid brings in much-needed federal dollars to our state at no cost to us for three years, and it adds jobs. In the end, we need to ask ourselves if it makes sense for our tax dollars to fund the Medicaid expansion and bring jobs into other states while not bringing any of that home."

The report used 2016 as a model, its authors say, because, although Medicaid expansion funds will be available to states in 2014, it is expected to take time for enrollment to reach the level where the program’s full economic benefit is revealed.