Gov. Nixon Says Study Shows Medicaid Inaction Is Costing Missouri Jobs

JEFFERSON CITY, Mo. – Gov. Jay Nixon today issued a statement regarding a report from the Missouri Economic Research and Information Center (MERIC) showing health care job growth in Missouri is falling behind its peer states that have moved forward on Medicaid.

According to MERIC, health care job growth in Missouri has slowed to half what it was in 2011 and 2012. In addition, since January the average health care job growth rate in peer states that expanded Medicaid was more than double that of Missouri’s.

“As health care job losses continue to impact communities across the state, today’s report provides more stark and troubling evidence that Missouri’s economy is already suffering the consequences of the legislature’s irresponsible inaction on Medicaid,” Gov. Nixon said. “Health care should be the fastest growing sector of our economy, but because of the legislature’s refusal to bring Missourians’ tax dollars home, this important industry is losing steam.”

According to MERIC, health care is Missouri’s largest employing sector, providing jobs to 1 in 6 workers in the private sector. MERIC’s analysis of new numbers released Friday by the Bureau of Labor Statistics (BLS) shows that Missouri’s health care industry is “growing at less than half the rate of the average growth in peer states that have expanded Medicaid.” According to the report, “over the first five months of 2014 compared to the same period in 2013, the states that expanded Medicaid had increased Healthcare and Social Assistance employment that averaged 2.1 % whereas the peer states that had not expanded Medicaid by June 2013 averaged a growth rate of 0.7%.” Health care job growth in Missouri is up just 0.9% from a year ago, significantly less than the year-over-year gains in 2011 and 2012, when the industry averaged 1.9% growth.

MERIC also examined the economic impact of the results of a first quarter survey by the Missouri Hospital Association, which found that inaction on Medicaid had already cost the state more than 3,100 jobs over the course of just six months. MERIC expects these job losses to impact an additional 2,001 jobs in the state due to indirect effects to companies and organizations that support hospitals and businesses that rely on worker spending. These jobs support nearly $260 million in wages and $395 million in Gross State Product.

Medicaid reform and expansion would bring the dollars that Missourians send to Washington – $2 billion a year – back to the state to provide health care coverage to 300,000 working Missourians making no more than $32,913 a year for a family of four. As a result of the legislature’s failure to act, those dollars – $5.47 million a day – are now being spent in other states. A majority of states, including Missouri’s neighboring states of Arkansas, Kentucky, Illinois and Iowa, are moving forward with plans to expand and reform Medicaid.

Under the Affordable Care Act, Medicaid expansion also helps to compensate for federal payment cuts to hospitals and health care providers. Even though Missouri did not expand Medicaid, many of those payment cuts are still taking effect, forcing many hospitals to reduce staff and services.

According to a previous analysis by the Missouri Economic Research and Information Center (MERIC), expanding and reforming Medicaid would result in the creation of 23,868 jobs, $9.9 billion in new wages, and $14.6 billion in new Gross State Product (GSP) from 2015 to 2022. According to the report, Medicaid expansion would also generate $402 million in new state general revenue from 2015 to 2022, including $53 million in new general revenue in 2015 alone.