Reduced Medicaid Spending May Cost Ohio Jobs

By Ken Stammen, The Columbus Dispatch, Ohio

Dec. 16–Reduced Medicaid spending could cost Ohio 24,000 jobs, including 3,459 in Franklin County, a study has found.

The study, released yesterday, was conducted by researchers at Ohio State University on behalf of the Health Policy Institute of Ohio, a nonpartisan health-research group.

The current state budget reduces Medicaid spending growth by $745 million in fiscal years 2006 and 2007, and federal Medicaid spending by $1.21 billion. Those are reductions from the projected cost of maintaining Medicaid’s existing payment and coverage policies.

Medicaid is a federally funded, state-administered program that pays for health-care services for the poor.

The federal government matches every $1 that Ohio spends on the program with an average of $1.40 in federal money, according to the institute.

The study concluded that the lower spending levels mean that fewer poor people will get medical services, causing lost jobs as the effect ripples through the state’s economy, institute spokesman Jason Sanford said.

Every $1 Ohio spends on Medicaid generates $3.18 in economic activity, the researchers found. Medicaid generates $13 billion in revenue for the state’s health-care system.

”Medicaid is a revenue stream for health-care facilities in the state,” Sanford said. ”A lot them rely on it to maintain their offices and services.” He emphasized that the institute didn’t release the study to suggest that Medicaid spending shouldn’t be reduced.

”We just wanted to highlight that there are unintended side effects that need to be considered in the future,” Sanford said.

The Medicaid-related job cuts will cost the state $33 million in income taxes, according to the study.

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