LANSING – Michigan would see a loss of medical workers and a slowing of economic growth if it chooses to cut Medicaid funding, contends a report issued by the Michigan State University’s Institute for Public Policy and Social Research and the Institute for Health Care Studies.
The join report said $100 million in state Medicaid cuts would mean a loss of $131 million in federal funds and $181 million in personal income. The loss in income would come from as many as 6,300 jobs cut, mostly in health care.
“It is fair to say that until reasonably full employment can be reached, cutting Medicaid as a way to balance the state budget contributes to higher unemployment,” the report said. “Lawmakers need to weigh these issues carefully as they consider different budget balancing options.”
Raising taxes by $100 million to cover the needed funding would mean only a $35 million reduction in personal incomes and loss of only some 1,000 jobs, the report said. And $100 million in cuts to a program that did not provide federal matching funds would mean $76 million in lost income to residents and elimination of 2,700 jobs.
“(I)f general fund spending on Medicaid were cut by $100 million, the resulting loss in income would reduce tax revenue going into the general fund (conservatively, by about five percent of the income loss),” the report said. And it noted that the loss of payments to hospitals and nursing homes would mean loss of the provider taxes on those facilities that help to contribute to Medicaid funding.
But the report also noted that, given time, the economy would adapt to the cuts.
This story was provided by content partner Gongwer News Service. To subscribe, click on Gongwer.Com
