WVU study: Medicaid cuts would have deep impact on West Virginia’s economy

Stories | WVU Today | West Virginia University

Cutting Medicaid in West Virginia would have substantial economic impact
on the state’s economy, according to a study released today by the Bureau of
Business and Economic Research in West Virginia
University’s College of Business and Economics.

The research was funded by the West Virginia Health Care Association, the
West Virginia Hospital Association and the West Virginia Behavioral Healthcare
Providers Association. Nearly 30 percent of state residents are enrolled in the
program. In 2017, the study said, Medicaid accounted for nearly $3.7 billion in
the state’s economy directly.

“The bottom line is that Medicaid has a pretty large effect on our state
economy,” said John Deskins, WVU economist
and BBER director. “Medicaid injects federal dollars into West Virginia’s
economy, so any cuts to the program takes that money out of our economy.”

Deskins said the goal of the study was to look at the economic impact of
Medicaid in West Virginia and determine what ripple effects, if any, such cuts
would create. Economists looked at a hypothetical $10 million cut to Medicaid
in West Virginia, and the result was a reduction of $49 million in overall
annual economic output.

“In this study, we took a hypothetical scenario and looked at what would
happen if West Virginia would cut Medicaid by $10 million, or around 1 percent,”
Deskins said. “Medicaid is a joint program whose funding is shared by the
federal and state governments. For every $1 the state puts up for Medicaid, the
federal government provides nearly $2.90. Therefore, if the state cuts Medicaid
by $10 million, you are immediately taking $29 million in federal funding out
of the economy.”

The study noted that the impact does not stop there, as the multiplier
effect of the cuts would result in a total economic impact loss of
approximately $49 million, including a loss of an estimated 520 jobs annually.

“This $29 million in reduced federal spending would represent a direct
loss …

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