The results are in: Accepting federal healthcare funds strengthens state finances, creates jobs, and grows state economies

April 30, 2015 by

“The results are in. Other states are realizing tremendous benefits from accepting federal healthcare funds. It’s not too late for Maine to join them.”

by Christy Daggett and Mark Sullivan

New Jersey Governor Chris Christie is taking advantage of a steep reduction in hospital claims for uncompensated care to save $148 million in state general revenue previously needed to provide care to the uninsured.

Governor Rick Snyder has used recent health care savings in Michigan to restore the state’s rainy day fund from $2 million when he took office to more than $300 million today.

Governor John Kasich saved $470 million from Ohio’s projected two-year budget – because far more Ohioans signed up under expanded Medicaid, with its 100 percent match rate, than under traditional Medicaid which required states to pick up 50 percent or more of the cost.

Other than being Republicans, what do these three governors have in common? They are among the 29 governors- Republican and Democrat –who are realizing substantial, measurable benefits from accepting federal Affordable Care Act (ACA) funds to expand healthcare in their states.

Since President Obama signed the ACA in 2010, we and other supporters have maintained that accepting federal healthcare funds under this landmark legislation would be good for the thousands of uninsured Mainers who are one accident or illness away from financial catastrophe. MECEP also provided analysis to show that these funds would support thousands of jobs, infuse hundreds of millions of dollars into the Maine’s economy, and deliver benefits to even the most disadvantaged corners of state.

Now, we have the results from states that accepted federal healthcare funds to confirm our assertions. In those states, health care systems are on firmer financial footing, the percentage of people without health insurance is shrinking faster, job growth is greater in the health care sector, and state balance sheets are healthier all because they have accepted federal healthcare funds.

An analysis by Fitch Ratings found that healthcare and social assistance jobs grew thirty percent faster in states accepting federal funds than in states refusing the dollars.  In Kentucky, an estimated 14,000 new jobs were created in 2014 alone. The University of Louisville now projects that Kentucky will add 40,000 new jobs through 2020 – with an average salary of $41,000 – attributable to accepting federal healthcare funds.

Refusing to accept federal healthcare funds doesn’t just prevent new jobs creation: it threatens existing healthcare jobs. Twenty-three Maine hospitals were in the red in 2013. Uncompensated or “free” care creates huge burdens for hospitals which must waive payment, shift costs to those who have insurance, or force layoffs and make other cuts to offset the cost. Large hospital chains doing business in both expansion and non-expansion states now report sharply different rates of uncompensated care across state boundaries, shoring up the budgets of facilities in expansion states.

While we cannot recoup the nearly half a billion dollars in federal healthcare funds Maine has lost to date, there’s still time for the state to act for the future. Today, the Maine legislature’s Joint Standing Committee on Health and Human Services will be holding a hearing on three bills, LDs 633, 808, and 854, which include provisions for the state to join the 29 states and the District of Columbia and seize the benefits of accepting federal healthcare funds.

A recent report prepared by Manatt Health Solutions for the Maine Health Access Foundation, projected that accepting federal healthcare funds now would yield $26.7 million in net savings to Maine’s general fund in 2016. There are also still nearly 70,000 uninsured Mainers who would be eligible for coverage. And accepting federal funds would still support 4,400 jobs statewide and add about $500 million to state’s economy annually.

The results are in. Other states are realizing tremendous benefits from accepting federal healthcare funds. It’s not too late for Maine to join them.

 

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