Report Says Medicaid Expansion Will Boost Colorado’s Economy
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A new study of Medicaid expansion commissioned by the Colorado Health Foundation, and conducted by legislative budget analyst Charlie Brown and a team of economists, says expanding Medicaid to an estimated 275,000 additional people will cost Colorado less than the price of not adding them. Brown and his team found that expanding Medicaid would be similar to a stimulus program for Colorado because millions of federal dollars will flow into the state to pay for the new patients’ care (federal taxes will pay 100 percent of the costs of Medicaid expansion from 2014 to 2016, then taper to 90 percent by 2020).
Key findings from the report include:
- In FY 2025-26, the last year of the study period, a comparison of the “no expansion” and “full expansion” options shows that the following economic impacts will occur as a result of the decision to fully expand Medicaid:
- The economy, as measured by state gross domestic product (GDP), will be 0.74 percent larger than if Colorado does not expand its Medicaid program. Expansion will result in just less than $4.4 billion in additional state economic activity in 2025.
- Average annual household earnings will be $608 more with full Medicaid expansion compared to no expansion.
- Colorado will have 22,388 more jobs in 2025 if the state fully expands Medicaid.
- While Medicaid expansion is not free, the combination of federal support for expansion populations and state savings in programs makes full expansion less costly to the General Fund than no expansion until FY 2020-21.
- By FY 2025-2026, state General Fund appropriations would be a cumulative $133.8 million less for full Medicaid expansion than if the state chose not to expand.
- The larger economy that would result from Medicaid expansion will generate more state tax revenue without an increase in tax rates. In FY 2025-26, tax revenue is projected to be $128 million higher due to a decision to expand Medicaid. In each year, the combination of the additional revenue generated from the larger economy and savings in other General Fund programs is sufficient to fund the state’s share of the cost of Medicaid expansion.
- Compared to no expansion, Medicaid expansion will add an additional 275,000 Coloradans to Medicaid enrollment by FY 2025-26. Those added to Medicaid insurance include 209,000 newly eligible adults without dependent children, 44,000 newly eligible parents and an additional 22,000 currently eligible but not enrolled children and parents.
- Medicaid expansion will reduce the number of uninsured non-elderly Coloradans by 189,000 by FY 2025-26 and reduce the percentage of uninsured in the non-elderly population from 11.1 percent to 7.7 percent compared with non-expansion.
Read the press release from the Colorado Health Foundation and link to the full report here.
