Employment Impact of Medicaid Expansion Lower Than Expected

by Curtis Farmer on September 14, 2015

in Administrative,Benefits

Healthcare Costs

Part of the Affordable Care Act provides states with additional funding in order to allow them to expand their Medicaid programs to include those under 65 years of age with income up to 133% of the federal poverty level. Oregon happens to be one of the 21 states that has expanded its Medicaid program. This allows any individual making under $16,243 per year or a family of 4 making under $33,465 to likely qualify for Medicaid coverage.

One of the key arguments from employers has been that this expansion of Medicaid eligibility might cause a reduction in the workforce. In other words, employers were concerned that an employee might quit their job if they were eligible for coverage through the Medicaid program. A recent study from the Urban Institute, however, found that this hasn’t shown to be the case, at least in 2014.

This study, funded by the Robert Wood Johnson Foundation, looked at the effects of Medicaid expansion and found no evidence that people newly qualifying for Medicaid were quitting their jobs. The study looked at four variables: Unemployment, labor force participation (includes those working and those looking for work), part-time employees, and total hours worked.

The study took the predicted or expected results based on the last 13 years of data as it applies to each of these variables and compared them to the actual results at the end of the year and found that there was little to no variance between the predicted data and the final employment numbers. In fact, those actual employment numbers increased following Medicaid expansion, but the differences were not significant enough to warrant any conclusion that this expansion has increased employment.

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