Saving Families from the Financial Ledge: Medicaid Expansion in Nebraska - Center for Rural Affairs report examines economic and income issues of expanding Medicaid

Release Date: 

06/04/2015

Contact(s): 

Jon Bailey, jonb@cfra.org, Phone: (402) 687-2103 ext. 1013
or John Crabtree, johnc@cfra.org, Phone: (402) 687-2103 ext. 1010

LYONS, NE - Today, the Center for Rural Affairs released a Rural Policy Brief examining the basic economic and income issues for all Nebraskans connected to expanding Medicaid. The brief is the first in a series examining findings of the University of Nebraska at Kearney report on the implications of LB 472 and their significance to rural and small town Nebraska.

Nebraska is one of the worst performing states in the nation in regards to small businesses offering employer-sponsored health insurance. This challenge of health insurance access is most acute in rural Nebraska since it is made up nearly exclusively of small businesses. This results in higher out-of-pocket medical costs for low-income families.
Jon Bailey, Center for Rural Affairs
 
On April 1, 2015, Dr. Allan Jenkins, Professor of Economics at the University of Nebraska at Kearney, and Dr. Ron Konecny, Professor of Management at the University of Nebraska at Kearney, released Nebraska Medicaid Expansion: Protecting a Critical Infrastructure, Supporting Main Street, Improving Worker Health and Productivity (the UNK Report). The UNK Report is an extensive benefit-cost analysis of several factors that should be considered in the debate on LB 472, the Medicaid Redesign Act, and Medicaid expansion in Nebraska.
 
“The UNK report finds that reducing healthcare costs for the lowest income group in the state would result in an increase of $1,100 in discretionary income per enrollee in an expanded Medicaid program, or $88 million in aggregate for all potential enrollees,” explained Jon Bailey, Director of Rural Policy at the Center for Rural Affairs and author of the Policy Brief released today. “This enhanced discretionary income would result in the creation of 800 jobs statewide, with $32 million in additional income, and the generation of $4.9 million in additional state and local tax revenue.”
 
In rural and small town Nebraska, that translates into 285 new jobs and $11.4 million in additional income due to the economic activity from enhanced discretionary income in rural areas, Bailey added.
 
According to the UNK report, expanding Medicaid in Nebraska would also save $21.4 million in liability from averted bankruptcies in 2015-2016, and a total of $142.7 million in savings from averted bankruptcies through 2019-2020.
 
“The UNK Report clearly shows significant economic benefits from expanding Medicaid to families throughout Nebraska, to the state’s economy, and to local businesses all over the state,” said Bailey. “In addition to providing health insurance and health care access to low-income families, expanding Medicaid will increase the discretionary income of low-income families by decreasing the share of income those families spend on health care.”
 
That discretionary income will be spent, primarily, on goods and services from local businesses. In turn, those businesses create jobs that create more income, and businesses and new job holders pay more in state and local taxes that helps relieve tax burdens on all taxpayers, Bailey continued.
 
“The positive benefits of Medicaid expansion would flow throughout the Nebraska economy, making it a policy winner for the state and those who would benefit from the health insurance coverage offered by it,” Bailey concluded. “Nebraska policymakers must act on expanding its Medicaid program or leave all these positive benefits unrealized.”
 
To view or download a copy of the Center’s Policy Brief go to:
http://www.cfra.org/node/5669
 
And check out the Center’s counter on Medicaid dollars lost to Nebraska taxpayers at:
http://www.cfra.org/news/150305/nebraska-medicaid-losses-top-400-million
 

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