Federal funds for Medicaid could add 12,000 Colorado jobs

By Ann Imse
Colorado Public News

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A proposal to expand Medicaid to cover 160,000 more Coloradans will add roughly 12,000 jobs statewide, according to a rough estimate by economic development leader Tom Clark.

In coming months, the legislature will be debating whether to accept the federal offer that expands government health insurance to the working class and poor – which is part of the federal Affordable Cart Act. Colorado Gov. John Hickenlooper recently gave it his support and estimated it would bring $12.28 billion in federal funds back to Colorado taxpayers over 10 years.

Colorado Public News asked Clark, CEO of Metro Denver Economic Development Corp., to calculate the number of jobs created by such a large influx of cash. In a rough estimate with pen, lined paper and long division, Clark figured that half the money would go to jobs and half to buildings and equipment, to provide health care to all these newly insured people. Using an average $50,000 Colorado salary on the remainder, he came up with more than 12,000 jobs from the other half of the money.

Since the federal money is slated to continue, those jobs would as well. Positions likely would range from direct medical care to construction and computer support.

More than 12,000 permanent jobs would be a huge economic boost to the state. It amounts to one-quarter of all the jobs created in Colorado in the past year.

The Medicaid expansion money, however, comes with strings attached. The federal money is nearly free to Colorado’s government in the first three years. Then the state share rises gradually to 10 percent in 2020. That could top $100 million a year, and that commitment has Republicans like state Sen. Kevin Lundberg of Berthoud planning to vote against it. He says he’s concerned the state will be stuck with a bill it can’t afford.

Even so, the jobs created by the proposal “are a very attractive hook,” Lundberg said.

If approved by the state legislature, the Medicaid expansion would provide health insurance to people earning up to about $15,000, or close to what a full-time worker makes at the minimum wage. The coverage would extend to families of four with incomes of up to $30,657.

That could include people like the Barber family of Montrose. Brandon Barber works 60 hours a week at a tire store to support his family of five. His wife Tish stays at home to raise three sons. The children qualify for Medicaid now, but the expansion might add their parents. Their family income is right on the edge of the limit, so it’s not certain.

“Having medical insurance – I can’t even begin to describe what a relief that would be for me,” Tish Barber said. So far, she and her husband are in good health. But “my husband’s father died at a young age of a heart attack,” she said. So she knows she and her husband should be getting preventative care, to make sure they will stay healthy and be there to be parents to their children.

Colorado estimates the state share of extending Medicaid to working families like the Barbers at $1.2 billion over 10 years. Hickenlooper said only a small part of that, $128 million, would fall on taxpayers of Colorado, and this could be covered by improvements in efficiency in the existing Medicaid program.

Hickenlooper says the majority of the state share will be covered by other sources, including a fee already paid by hospitals. The Colorado Hospital Association has yet to agree to that. But hospitals stand to earn a large chunk of the billions of dollars in federal funds that would come into the state for medical care as a result of the proposed expansion. And CHA members already are paying some $500 million a year in fees used to match federal Medicaid funds.

Hospitals expect the provider fee will cover some of that $1 billion, said spokeswoman Melissa Phillips, but “it’s too soon for us to say how much.” Discussions are continuing, she said.

Advocates say Colorado should take the deal because its citizens will be healthier if they have insurance. Opponents believe the government should not be paying for health insurance for more people.

Clark said the cost of adding jobs with the Medicaid expansion is significantly more expensive than a typical economic development deal, where the state gives up tax breaks to entice a company to create jobs. But in this case, Coloradans pay the cost of caring for this group of currently uninsured people anyway, when they end up in hospital emergency rooms.

The question is whether Coloradans want help from the federal government to pay for health care services, he said. “That demand will not go away, just because we don’t want to take the federal money.”




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