Expanding Medicaid coverage to up to 149,000 New Mexico adults would increase state economic activity by $8.6 billion between 2014 and 2020, according to the University of New Mexico Bureau of Business and Economic Research.
In a report released Wednesday by the New Mexico Center on Law and Poverty, BBER said expanding Medicaid could create 8,461 new jobs by 2020.
The increased tax collections from new economic activity, plus cost savings achieved by replacing some safety-net programs with Medicaid, could generate $523.4 million more in revenue to the state general fund between 2014 and 2020. That would occur even after the state spends an estimated $281 million in that period as its share of the cost of covering more Medicaid beneficiaries.
BBER said the Center on Law and Poverty helped fund the study but “the data and conclusions drawn in the report belong solely to BBER.” The report said the study was done with the encouragement of the Legislative Finance Committee, the legislature’s economic and financial analysis agency.
The federal Affordable Care Act allows states to expand Medicaid to adults ages 18 through 64 years who earn up to 138 percent of the federal poverty level. Currently, most Medicaid recipients are low-income children, people 65 years and older, and disabled adults.
The federal government will pay the entire cost of expansion for states that choose to expand from 2014 through 2016, 95 percent in 2017, 94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and beyond.
BBER estimated the federal share of expanding coverage if 126,000 New Mexico adults receive Medicaid in 2014, growing to 149,000 in 2020, would be $6.4 billion from 2014 through 2020. The state would pay $258 million in that period.
Gov. Susana Martinez has yet to decide if New Mexico should expand Medicaid and accept the new federal money, according to a Human Services Department spokesman. HSD administers Medicaid.
“Economic impacts on the state’s economy result when out-of-state funds are used to purchase goods and services within New Mexico and thereby stimulate an overall expansion of production, employment and labor income,” according to BBER.
BBER economic models show that the expansion would create $4.5 billion over the six-year period in new health care activity and $719 million in administrative activity by the health care plans the state would use to manage Medicaid services.
Another $3.4 billion in economic activity is the result of more health care employees spending their earnings with businesses around the state.
— This article appeared on page C1 of the Albuquerque Journal