Missouri and Medicaid: The Small Business Perspective

Small Business Majority
Thursday, April 4, 2013

When the Affordable Care Act was signed into law in 2010, it delivered sweeping reform to the nation’s healthcare system. A significant feature of the law is an expansion of Medicaid to cover a larger number of low-income individuals. In June 2012, the Supreme Court ruled it was up to each state to decide whether to expand eligibility for Medicaid. The Medicaid expansion gives every state the opportunity to take advantage of federal funding that will support jobs and stimulate economic growth throughout the state while expanding health coverage for its residents. For small business owners, this means additional federal dollars flowing into the state that will then be recirculated to their businesses, boosting their bottom lines and helping them create more jobs.

Key Findings

An expansion will level the playing field for Missouri’s small businesses: Medicaid expansion would cover about 300,000 additional people, most of them low-wage working adults. Because so many working adults would qualify for Medicaid, small businesses that cannot afford to offer their employees health insurance would be better able to compete for workers with big businesses that can offer health insurance.

Medicaid expansion will stimulate Missouri’s economy: Just like a new factory or federal construction project, Medicaid expansion will pump new money into the economy. This will bring an estimated $8.2 billion additional federal dollars to Missouri between 2014 and 2020, and the economy will generate nearly $856 million in state and local taxes. Healthcare providers and businesses will spend large portions of their revenues and salaries in the local economies. As a result, the Medicaid expansion will create jobs in all parts of the state economy. Between 2014 and 2020, the jobs created by the expansion would add $6.9 billion in labor income.

Medicaid expansion will help reduce the ‘hidden tax: When someone without insurance seeks medical care they can’t pay for, the state or a charity may pick up some of the cost but the balance remains unpaid. To cover it, insurers charge higher rates when the insured receive care, and these increases get shifted to higher premiums. In 2008, the costs of uncompensated care increased family health insurance premiums by an estimated $1,017. By reducing the number of uninsured people in Missouri, expanding Medicaid will lower these pass-through costs to insured residents and business owners.

Press Release