States across the country are citing economic development and job creation as reasons for expanding Medicaid and other healthcare systems. The Kansas City Star reported today that the Greater Kansas City Chamber of Commerce supports the expansion of Medicaid, saying that it would "create 24,000 jobs, and generate $856 million in state and local taxes from 2014 to 2020.”
In Alabama, CEO David Bronner is urging the Governor to expand the state's Medicaid program telling The Gadsen Times on Saturday,
"If you’re interested in economic development and you can bring $15 billion into your state for anything, whether it’s a nuclear plant, a new dam on the river or Medicaid money, that $15 billion is going to help the state.
...If you put billions of dollars into the state, it helps everything in the state. Think about how many are employed using that money — doctors, nursing homes, nurses. All is economic development, money coming into the state.”
Last week, Republican Governor Jan Brewer of Arizona surprised everyone when she announced during her State of the State speech that she wanted to expand Medicaid. In its article titled, 'Arizona Medicaid Expansion Urged By Gov. Jan Brewer, Obamacare Foe', the Huffington Post writes,
"Brewer placed her decision on Medicaid in the context of the main economic development theme of her speech. She told lawmakers that she did not want to forfeit the federal funds to other states that have agreed to expansion, singling out such neighboring states as California and Colorado. She said that the Medicaid expansion, which she described as "just slightly beyond" what voters had previously approved, would insert $2 billion into the Arizona economy."
Similar stories have been reported about Republican Governors from Nevada and New Mexico with the New York Times' Fernanda Santos writing on Saturday [referring to Arizona Governnor Jan Brewer], "Her fellow Republican governors in the Southwest, Susana Martinez of New Mexico and Brian Sandoval of Nevada, used a similar argument to justify their decisions to do the same thing."
In Colorado, Governor John Hickenlooper, a Democrat, inititally took a 'wait-and-see' approach but announced recently that he is in favor of expanding Medicaid because of the economic benefits to the state. Now, some in the business community are following suit. The Colorado Springs Gazette reported last week that Tom Clark, CEO of the Metro Denver Economic Development Corp. estimates that the Medicaid expansion would create up to 12,000 jobs - a full twenty-five percent of the jobs created in Colorado during all of 2012. According to the report, these jobs are expected to remain in Colorado and are getting the attention of, if not yet convincing, even Republican lawmakers in the state:
"Since the federal money is slated to continue, those jobs would as well. Positions likely would range from direct medical care to construction and computer support.
More than 12,000 permanent jobs would be a huge economic boost to the state. It amounts to one-quarter of all the jobs created in Colorado in the past year.
The Medicaid expansion money, however, comes with strings attached. The federal money is nearly free to Colorado’s government in the first three years. Then the state share rises gradually to 10 percent in 2020. That could top $100 million a year, and that commitment has Republicans like state Sen. Kevin Lundberg of Berthoud planning to vote against it. He says he’s concerned the state will be stuck with a bill it can’t afford.
Even so, the jobs created by the proposal “are a very attractive hook,” Lundberg said.
If approved by the state legislature, the Medicaid expansion would provide health insurance to people earning up to about $15,000, or close to what a full-time worker makes at the minimum wage. The coverage would extend to families of four with incomes of up to $30,657."
The Colorado Center on Law & Policy also supports the expansion, writing the following in a recent report titled, 'Expanding 'Medicaid Makes Colorado's Workforce and Economy Healthier':
"Providing access to health care to 122,000 working Coloradans by expanding Medicaid will have widespread benefits throughout Colorado’s economy. Not only will it provide those low-wage workers the peace of mind and physical well-being that most higher-income Coloradans already enjoy. But expanding Medicaid will also bolster some of the primary economic engines in Colorado because many of the people who benefit directly are employed in restaurants, ski resorts and key industries throughout the state. Failing to expand Medicaid to capture this critical population would undermine health care reform in Colorado."
Colorado voters put the Democrats back in control of both chambers in last year's November elections. One of those Democratic lawmakers, Senator Irene Aguilar, M.D. is a practicing physician. Senator Aguilar has received several awards for her work as a doctor and for her accomplishments in the legislature. She was named Assistant Majority Leader for the newly opened 2013 legislative session. She has been a prominent leader in health care related legislation and will introduce a bill to expand the state's Medicaid program along with other proposals.
But she's not stopping there. She and her allies at Co-operate Colorado and the Colorado Foundation for Universal Health Care have launched a campaign to establish a statewide health care cooperative. They too are employing an economic development message: "The Colorado Health Care Cooperative would create jobs and attract new business to Colorado."
The Cooperative would result in a net job gain for Colorado with comparable studies suggesting that the gain would be between 28,000 and 65,000 new jobs. The formation of a statewide cooperative provides additional benefits to the state by keeping health care dollars in the the state and local economies:
Local spending builds the Colorado economy
A sizeable portion of our premium money currently goes out of state to national insurance executives, stockholders, and to lobbyists and political campaigns that operate contrary to our interests.
Companies sometimes decide to provide health services by workers outside Colorado. For example, WellPoint recently laid off pre-service nurses in Colorado so the work could be done in Manila. (Lee, D., The Los Angeles Times, Worries Grow as Healthcare Firms Send Jobs Overseas, July 25, 2012.)
Money previously sent out of state could pay for additional Colorado health care professionals and for educational institutions to train them. These health care workers live in Colorado communities and spend a large portion of their money locally.
Local money creates new jobs, increases the tax base and expands the economy.
Lowering premium growth raises middle-class wages and enables employers to hire more workers. (Cutler, D., Sood, N., New Jobs Through Better Health Care, www.AmericanProgress.org Jan. 2010)
Nurses, doctors, and other health care professionals would replace the claims processors and claims denial jobs.
The end of “job-lock” (chained to a job for the health coverage) improves quality of life by allowing part-time work while young children are at home, or finding a job suited to one’s skills.
Separating health care from employment and reducing costs attracts businesses
New employers would be attracted to Colorado because the employer contribution to health care would be substantially lower and employers would be relieved of responsibility for employee health care.ii
Entrepreneurs, small business people, and family farmers prosper when health care is affordable. It enables bright entrepreneurs to take the necessary business risks involved in starting or growing businesses without putting their families at medical risk.
Here's how it is envisioned:
The Coooperative would create a single risk pool where all residents of Colorado - regardless of marital, employment or financial status - would be owner-members of the Co-op. The State of Colorado would ask for waivers from the federal government and pool all federal Medicare and Medicaid dollars with other state-funded programs, such as the 'Colorado Indigent Care Program' (CICP) - a discount program that provides low-cost health care to residents who don't qualify for Medicaid benefits. Creating a single risk pool lowers overall costs and provides a much more efficient use of health care dollars already being spent in the state.
Instead of paying premiums to a health insurance company, individuals and business would pay smaller premiums based on payroll and income. As noted above, a single risk pool would bring down health care costs for everyone, including business owners who would no longer have to worry about the time and expense of administering health insurance plans for their employees - and their health care costs would be predictable from year to year. It would also give the people of Colorado - through the cooperative - the ability to negotiate prescription drug prices, bringing more savings to the state and to individual Coloradans.
Of course, if individuals still want to purchase additional 'cadillac' plans from the insurance companies for benefits not covered by the Cooperative, they would be free to do so using the exhange setup under the Affordable Care Act.
Addressing the opposition - who believes that this is 'government-run healthcare' - advocates for the cooperative say that the "Colorado Health Care Cooperative is not government-run. Providers are public or private, non-profit or for-profit - as they choose. Members govern the Cooperative, not the federal or state government. Members choose the provider they want as their “medical home”—the health professional who is responsible to work with them and to coordinate with specialists, hospitals and auxiliary professionals to help keep them healthy."
The cooperative would also incorporate the medical portion of workman's compensation policies required of businesses operating within its borders, leaving the business owners with responsibilities for only half of the administrative responsibilities required by state law.
Advocates also note that efficiencies and reduction in the role of middlemen does eliminate some jobs. Many of those are health insurance jobs and are not in Colorado, however. Some similar jobs such as claims payment could continue in Colorado.
An economic impact study is currently underway. The results of the study are expected to be available in the coming weeks when the bill will be formally introduced by Senator Aguilar. The full text of the bill's first draft is available online. Stakeholder's are being asked to read the first draft and submit their comments and provide feedback.
With the election season finally over, legislators are heading back to state capitols across the country. Jobs and the economy - and the debate over health care and its role in economic development policies - are dominating the headlines. According to the Colorado Center on Law & Policy, Colorado had 33,600 fewer jobs at the end of December than it did before the recession started with analyst estimates calculating a total jobs shortfall* of 205,089. With that large of a hole to dig out of, lawmakers in the state understand that job creation continues to be job number one - and the economic benefits that come with reducing the number of uninsured & improving the quality and delivery of health care systems are becoming part of the overall solution in states across the nation.
*[source: CCLP]: Colorado's job shortfall, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 205,089. That number includes the 33,600 jobs Colorado lost plus the 171,489 jobs it needs to keep up with the 7.3 percent working-age population growth Colorado has experienced in the 60 months since the recession began. (Figures 5-6) In short, Colorado will likely struggle with the effects of the 2007 recession for months to come.