Study: Expanding Medicaid in NC Would Lead To Nearly $22B in Increased Business, 43K More Jobs

Published Thursday, December 18, 2014 at 10:17 am

Dec. 18, 2014. A new report shows that by 2020 the North Carolina workforce could grow by more than 43,000 jobs, and the state’s economy could gain tens of billions in business revenue if the state expands Medicaid eligibility requirements.

The report—authored by researchers at George Washington University in Washington, D.C., and funded by the Cone Health Foundation and the Kate B. Reynolds Charitable Trust—includes data for all 100 North Carolina counties, and concludes that nearly 500,000 currently uninsured residents could gain coverage if the state closes the Medicaid coverage gap.

Researchers estimate that as many as 300,000 people who are currently uninsured would gain Medicaid coverage in 2016 if the program is expanded that year, with another 178,000 likely to enroll in 2017.

“We have some of the most restrictive Medicaid eligibility requirements in the country, so hundreds of thousands of low-income North Carolinians will benefit if the program expands,” said Susan Shumaker, president, Cone Health Foundation. “The decision not to expand the program impacts all of us; not just those who are struggling to access the care they need to stay healthy. It has already cost jobs and billions of dollars, and will continue to do so.”

The report estimates that if the state expands Medicaid by 2016, 43,314 jobs will be added to North Carolina’s workforce. Specifically, the health care sector could gain more than 23,000 jobs—those needed to provide care to the newly insured. The construction, retail, professional and food service sectors would also see a boost in employment.

“The potential ripple effect goes far beyond the walls of hospitals, physician offices and clinics,” said Leighton Ku, PhD, MPH, lead author of the report from George Washington University’s Center for Health Policy Research. “The data highlight that local economies are losing out on millions of dollars in revenue—money that could be spent on education, infrastructure and other needs—and the lost federal dollars in Medicaid funding are even more substantial.”

Data show North Carolina’s uninsured rate of 18.1 percent is higher than the national average; so is the state’s unemployment rate. If the state does not change course and expand Medicaid eligibility, Ku and his coauthors find that between 2016 and 2020, North Carolina will turn down more than $21 billion in federal funds to cover the newly insured by Medicaid. In exchange, the state would have to contribute $1.7 billion. In addition, after accounting for higher tax revenue due to economic growth and potential savings in other health care services, the state budget could save more than $300 million from 2016 to 2020.

Furthermore, the report authors find that the state will miss out on $862 million in tax revenue and $13.7 billion in gross product, or goods and services produced in the state. Finally, the report notes that the benefits associated with Medicaid expansion and the predicted losses without it are universal across North Carolina’s 100 counties.

“Medicaid expansion in North Carolina does not pit cities against suburbs or the countryside. This issue stretches to every corner of the state,” said Karen McNeil-Miller, president, Kate B. Reynolds Charitable Trust. “Expanding the program means not only expanding coverage to residents in every county, but it also means expanding the opportunity for good-paying jobs that improve the lives of our neighbors and boost local economies statewide—from Murphy to Manteo.”

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About Cone Health Foundation

Cone Health Foundation’s mission is to measurably improve the health of the people in the greater Greensboro area.  Founded in 1997, the Foundation is a support organization to Cone Health and is Greensboro’s only health-specific philanthropic organization.  Since its inception, Cone Health Foundation has awarded more than $71 million to community nonprofit partners. The majority of these grants fall into the Foundation’s four focus areas:  Access to Health Care, Adolescent Pregnancy Prevention, HIV/AIDS and Substance Abuse and Mental Health.

About The Kate B. Reynolds Charitable Trust

The Kate B. Reynolds Charitable Trust was established in 1947 and is now one of the largest private trusts in North Carolina. Its mission is to improve the quality of life and quality of health for the financially needy of North Carolina. The Health Care Division promotes wellness statewide by investing in prevention and treatment. The Poor and Needy Division responds to basic life needs and invests in solutions that improve the quality of life and health for financially needy residents of Forsyth County. Wells Fargo Bank, N.A. serves as sole trustee.

About George Washington University

In the heart of the nation’s capital with additional programs in Virginia, the George Washington University was created by an Act of Congress in 1821. Today, GW is the largest institution of higher education in the District of Columbia. The university offers comprehensive programs of undergraduate and graduate liberal arts study, as well as degree programs in medicine, public health, law, engineering, education, business and international affairs. Each year, GW enrolls a diverse population of undergraduate, graduate and professional students from all 50 states, the District of Columbia and more than 130 countries.

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