A new report by Families USA, a non-partisan health care advocacy organization, suggests that Congressional proposals to limit federal spending on the Medicaid program (i.e., remove its entitlement status) could have severe economic consequences for the states.
Using a U.S. Department of Commerce economic model, the authors show how proposals to reduce federal Medicaid expenditures would have a multiplier effect and result in a loss of many billions of dollars to the states, and lead to thousands of job losses. For example, in Connecticut, a 5% cut in the state’s 2011 federal share of Medicaid would be a loss of just over $225 million, creating a risk of over $460 million in lost business activity and 3,690 lost jobs. Under a 15% cut, the state would stand to lose almost $1.4 billion in business activity and over 11,000 jobs.
