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Press release
February 20, 2013

Report: Expanding Medicaid Would Give a Boost to Florida’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 Florida’s Medicaid program would not only bring access to affordable health care to 1.8 million Floridians, but it would also support approximately 71,300 new jobs in 2016 across the spectrum of the state’s economy.

The report, released jointly by Florida CHAIN and the national consumer advocacy organization Families USA, spotlights a wide range of health care and economic benefits that Florida 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 58 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 $4.9 billion in Medicaid dollars would be spent on health care in Florida.

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 Florida dealing with an unemployment rate of 8.0 percent in December 2012, a gain of 71,300 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 Florida by $8.9 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 Florida could save $1.3 billion in uncompensated care costs from 2013 to 2022.
  • Strengthen the state’s health care system. The Florida Hospital Association says that the state’s hospitals absorbed $3 billion in costs in 2009 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 Floridians 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 Floridians become healthier and more productive. Almost two million Floridians will now have access to affordable health coverage, an essential step to healthier lives and a gain for Florida.

"The Medicaid expansion is a win-win-win proposition for the people of Florida," 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."

"Being able to see a family doctor is a basic human need and a human right, and expanding Medicaid is a far better way for families to get health care than having to go to an emergency room," Laura Goodhue, Executive Director of Florida CHAIN, said today. "By taking part in this expansion of Medicaid, Florida can open the door to quality health care for more than a million Floridians, including childless adults who have been locked out of the private market because of previous illness or because they can't afford it. Medicaid expansion is the right thing to do morally and economically for Florida."

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.