Medicaid expansion could create 14,500 jobs in N.J., according to report

Jessica Perry//February 28, 2013

Medicaid expansion could create 14,500 jobs in N.J., according to report

Jessica Perry//February 28, 2013

In addition to helping struggling New Jerseyans obtain health care coverage, Gov. Chris Christie’s decision to expand Medicaid under the Affordable Care Act is expected to spur job growth and increase economic activity in the state, according to a report released today by the think tank New Jersey Policy Perspective and Families USA, a…Beginning in January, 395,000 uninsured residents will be newly eligible for Medicaid. Virtually all costs of that care will be paid by the federal government; currently, New Jersey pays for half that care. The federal government will pay 100 percent of the expanded coverage for three years; after 2016, the federal share gradually falls to 90 percent by 2020, where it will stay thereafter.

According to the report, by 2016, New Jersey will receive $1.1 billion in federal funds for the expansion, which will create about 14,500 jobs across all sectors of the economy.

“With unemployment in New Jersey hovering near 10 percent, expanding Medicaid is critically important — not only because so many uninsured New Jerseyans will be able to obtain affordable coverage, but because of the strong impact the expansion could have in reviving the state’s ailing economy with much-needed jobs and economic activity,” said NJPP senior policy analyst Raymond Castro.

If more residents have health care coverage, more people are needed to provide services to them. If a nurse is hired, he or she will have more discretionary income, which will then impact the economy outside the health care sector.

That’s the multiplier effect, said Ron Pollack, executive director of Families USA.

“The Medicaid expansion … would reduce the number of people who can’t afford health care, it will increase the number of jobs throughout the state and it will strengthen the state’s economy,” he said.

The increased federal funding and jobs created are projected to boost economic activity in New Jersey by $1.8 billion in 2016, in part through a reduction in spending on state-funded health coverage for the uninsured.

Although Medicaid expansion funds will be available in 2014, the report uses 2016 as a model, as it will take time for enrollment to reach the level where the program’s full economic benefit is reached.