Here at Community Catalyst, we have always been proponents of closing the coverage gap, knowing that access to coverage is good for consumers, communities and state budgets. However, 22 states are still leaving just under 4 million people without access to health care. Fortunately, good news from Kentucky provides compelling evidence that closing the gap is the right decision, and we hope other states take note. In addition to covering 310,000 previously uninsured Kentuckians (and that’s just counting through June of 2014), closing the coverage gap produced a domino effect of benefits to the state’s economy and helped the state’s uninsured rate drop to 12 percent from 20 percent. The state recently released a detailed report that elevated these important economic impacts which include:
- Closing the coverage gap added 12,000 jobs in 2014. This number will rise to 40,000 jobs by 2021, with an average salary of $41,000. The combination of federal Medicaid dollars coming into Kentucky and newly paying patients will boost health care jobs and services, and spending in other sectors. Together, these added jobs will raise more than $1 billion in state income and sales taxes from now until 2021.
- Closing the coverage gap boosted Kentucky’s state budget by $50 million by June 2014. Federal funds took a greater share of several state departments’ budgets and more state tax revenue was brought in from job creation (Table 22 of the report). Over the next eight years, Kentucky’s state budget will benefit from an $819.6 million net gain.
- Closing the coverage gap brought down the costs of treating uninsured patients. As more consumers gained coverage and became paying patients, uncompensated care fell by more than $1 billion dollars, or 60 percent, from 2013 to 2014. Reducing uncompensated care is a boon for state and local budgets, which bear a 32 percent share of uncompensated care costs. A companion Medicaid Hospital report revealed that Medicaid expansion revenues significantly exceeded federal funding (DSH payments) for uncompensated care (Tables 8 and 9 in the report, respectively). Thus, when DSH cuts go into effect in 2017, federal dollars from closing the coverage gap will ensure that hospital doors stay open to care for its patients.
Broadening access to health care coverage, adding jobs, generating revenue to the state economy and reducing uncompensated care is good news for Kentucky, and a proof point for every state still considering whether to close the gap. These initial results are especially illuminating in the South, where the opportunity to make a difference for consumers in the gap and state economies is high. Luckily for us all, this good news is attainable, but only if states legislators and governors decide to close the coverage gap.