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Will Medicaid Expansion Really Create Jobs?

May 27, 2015 - 4:45pm

With special session kicking off next week, a good deal of attention has turned to the continued negotiations between the two chambers of the Florida Legislature over Medicaid expansion and much of the focus has been on the costs and the role of the federal government.

But some groups are promoting Medicaid expansion as a job creator in Florida, including A Healthy Florida Works, a group which claims to be a bipartisan coalition of business owners, organizations and community leaders. The group is running a TV ad across the Sunshine State, insisting Medicaid expansion will save jobs and add 100,000 new ones to Florida.

But the jobs projections with Medicaid expansion are all over the map. The “pro jobs” conversation was started by the Obama administration in 2013 to promote Obamacare. Obama’s economic advisers projected that Florida would see 63,800 new jobs between 2014 to 2017 through Medcaid expansion.

Families USA, which supports Obamacare, has different numbers, insisting Medicaid expansion will create 71,300 new jobs in Florida come 2016. Back in 2011, the Florida Center for Fiscal and Economic Policy claimed there would be 65,000 new jobs due to Medicaid expansion. A year later, the Florida Hospital Association noted new health-care spending would lead to 54,288 new jobs over an 11-year period, but in 2013 bumped that figure up to 120,000 jobs.

Other groups like the Florida Democratic Party and the Florida Senate leadership have also been using the same talking points to promote Medicaid expansion in Florida, insisting it will create jobs.

But there are efforts to throw some cold water on these numbers. The financial analysis firm Moody’s insists if Medicaid expansion does create jobs, Florida will see only 10,000 to 30,000 of them over 10 years. Moody’s maintains that the proponents of Medicaid expansion are treating it as new medical spending in Florida.

"The crux of our analysis is shifting who is paying for it. It might be true that those people support 120,000 jobs, but maybe 10,000 to 30,000 are new jobs," Dan White, a senior economist with Moody’s, told Politicfact last fall.

Chris Conover, who teaches at Duke University both in medicine and business, wrote in Forbesin 2013 that nationally, Medicaid expansion is a jobs killer.

“Using the methodology of studies such as those done in Florida, claims of Medicaid job gains are overstated,” Conover wrote.

Conover noted these studies about job creation under Medicaid expansion in Florida only concern when the federal government will still be covering 100 percent of the cost of the expansion. Conover also noted, in 2020, Florida will be responsible for 10 percent of the costs of benefits under Medicaid expansion and for 50 percent of any additional administrative costs related to expansion.

"Any estimated federally-induced job gains would be offset by corresponding job losses arising from state taxes required for the Medicaid match,” Conover said.

But bringing jobs into the health-care mix is wrong, claim Katherine Baicker and Amitabh Chandra in a New England Journal of Medicine article. They write that when it comes to health care, beneficial treatment is hampered whenever health-care policy is evaluated on the basis of jobs.

“Treating the health-care system like a (wildly inefficient) jobs program conflicts directly with the goal of ensuring that all Americans have access to care at an affordable price,” they write.

In the meantime, with special session ready to start, voices across Florida insist federal dollars from Medicaid expansion may lead to job growth -- but these proponents can’t pin down a specific number.


Ed Dean, a senior editor with SSN whose talk-show can be heard on radio stations across Florida, can be reached at ed@sunshinestatenews.com. Follow him on Twitter: @eddeanradio.

 

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