Medicaid touted as needed economic stimulus

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A new study by Families USA makes a case for Congress extending a temporary increase in the Federal Medical Assistance Percentage rate based on more than direct assistance to the poor.

Approximately $3.35 of economic activity would be generated for every $1 Medicaid spends via the FMAP funding, according to a Families USA analysis. Business activity generated for 2005 is expected to be $367.5 billion for all 50 states. It also means more than $3.3 million jobs, with wages worth more than $130 billion, according to the group.

The $10 billion in temporary add-ons is set to expire June 30 if Congress does not intervene. Extending the added aid through fiscal 2005 would create more than $48 billion in new business activity, nearly 450,000 more jobs and $17.5 billion in added wages, Families USA contends.

Overall, at least 36 states would lose $100 million or more if the temporary add-ons were allowed to expire. Long-term care would be one of the biggest losers if that happens, advocates say.

The report, "Medicaid: Good Medicine for State Economies," can be seen at www.familiesusa.org.