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Medicaid study: Pa. economy could grow $3.2B annually with expansion

By - Last modified: March 28, 2013 at 12:07 PM

Medicaid expansion in Pennsylvania could grow the commonwealth's economy by at least $3.2 billion annually and support 35,000 to 39,000 jobs over the next seven years, according to a study commissioned by the Hospital & Healthsystem Association of Pennsylvania.

The study done by RAND Health, a research unit of RAND Corp., concluded that expansion could drop the state’s uninsured rate to 4.8 percent by 2016 under the Affordable Care Act. It is 12.7 percent now.

New personal income and gross receipts tax revenue produced by expansion will exceed the state’s expansion costs, the HAP report said.

Gov. Tom Corbett has said expanding Medicaid would cost the state more than $4.1 billion through 2021. He is reportedly considering a change of heart after initially declining to expand Medicaid.

Economic growth could be $23 billion through 2020, according to the report.

The RAND report also noted that Medicaid expansion in Arizona, Maine and New York produced a decrease in mortality of 568 per 100,000 of those newly eligible for coverage.

“Insured individuals with complex and chronic illnesses are more likely to manage their care, avoiding an escalation of health problems,” said HAP President and CEO Andy Carter . “Healthy adults are more employable and productive.”

The Pennsylvania Health Access Network and national health consumer organization Families USA issued its own report last month on Medicaid expansion and its impact on the commonwealth.

Dueling study

In other health care news, the National Federation of Independent Business Research Foundation said today that Pennsylvania might lose nearly 5,000 jobs as a result of a little known provision of the Affordable Care Act called the Health Insurance Tax.

The NFIB study showed total employment in Pennsylvania will decline by 2,591 to 4,601 by 2022 because of the increased costs associated with the HIT.

Overall gross domestic product also would be reduced — to the tune of at least $1.4 billion in lost sales among small businesses — because of the tax, the study said.

Beginning in 2014, the HIT will impose over $100 billion in new taxes on the small-business community, their employees and the self-employed over a decade. Those costs will ultimately be passed on to the consumer via higher premiums, the NFIB said.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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