How Medicaid Cuts Hurt the Economy

Medicaid acts as an economic stimulus, funding job creation and supporting hospitals, physicians, nursing homes, and other health services.  Medicaid spending ripples through the economy as health care workers spend their wages and health care facilities purchase necessary materials.  In short, Medicaid adds billions of dollars in economic activity.  The federal government boosts this activity by matching state Medicaid spending at least dollar for dollar, bringing new money into states.  

Cutting Medicaid spending forfeits federal funds, short-circuits the economic engine of Medicaid, and significantly worsens a state’s economic situation. 

Tools to quantify Medicaid’s economic impact on your state: 

For every state $1:  (% matching rate) / 1- (% matching rate) = federal share
or (.65) / 1- (.65) = 1.86

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