According to the Kaiser Family Foundation twenty one states are not moving forward with Medicaid expansion either due to their governor’s opposition, a legislative body’s opposition, or both. For example, the Wisconsin State Legislature recently voted to reject Medicaid expansion, while neighboring state Minnesota is moving forward with the expansion. The expansion is expected to save Minnesota $120 million over the next two years, while extending Medicaid to an additional 130,000 citizens. Meanwhile, Wisconsin, by refusing the expansion, is neglecting to provide coverage for 85,000 people who fall below 133% of the Federal Poverty Level mandated by the PPACA. Could Minnesota’s expansion potentially benefit low-wage earners in Wisconsin as well and what effect will it have on the Wisconsin economy overall?
Examining the effect that Massachusetts Medicaid Expansion to single adults had on the Rhode Island economy it becomes apparent. When Massachusetts passed MassHealth, which included Medicaid expansion to single adults living within 150% of the Federal Poverty Level, Medicaid enrollment increased by over 5% above the national average at its inception and continued increasing between 1% and 2% above the national average over the next three years according to the Centers for Medicare and Medicaid Services. Upon examination of Medicaid enrollment in the neighboring state of Rhode Island at this time we see Medicaid enrollments 6% annually below the national average during the same period, until the decline began tapering off in 2009. Rhode Island Medicaid does not currently enroll single adults, (they will begin doing so next year under the PPACA).
Did low wage earners in Rhode Island realize a good thing in 2006 when they saw the introduction of MassHealth and move? If so, rather than being detrimental wouldn’t this have been beneficial to Massachusetts economic recovery though the addition to its labor pool for manufacturing and service jobs? According to the Bureau of Labor Statistics, last April Massachusetts posted a jobless rate of 6.4%, significantly lower than the national jobless rate of 7.5%, while Rhode Island with a jobless rate of 8.8% was significantly higher. Massachusetts' unemployment level was well below the national average in 2006 when Medicaid was expanded to include single adults, and remained below the national average during the entire recession despite the enrollment.
While the Census bureau shows that Massachusetts’ population did not increase above the national average during this period, it did increase percentage wise more than any other New England State. Additionally, while Rhode Island had already begun a slight population decrease in 2003 we see the population decrease markedly after the introduction of Mass Health, (from 1,071,414 in July of 2004 before Medicaid expansion was announced, to 1,052,219 in July of 2009, a total of -1.73%). In fact, the only Massachusetts border state where population decreased at this time was Rhode Island. Notably as well, according to the Census Bureau, we see the Median Annual Income of Massachusetts residents decrease by 1.25% from 2005 to 2006, while we see the Median Annual Income of Rhode Island residents increase by 7.9%. It seems plausible that many of the mobile Rhode Islanders ended up in Massachusetts; however, did they do so for healthcare reasons? Newspaper and magazine articles at this time were actually encouraging people to move to Massachusetts in order to gain health care, so it seems likely that many of the low-wage earners ended up there.
Rhode Island’s largest city, Providence, lies just over the Massachusetts border. In fact the population of the greater metropolitan area of Providence is larger than the population of the state due to the inclusion of Massachusetts residents. It would seem to be quite easy for a low wage earner, especially a single adult, to move less than five miles in order to gain health insurance. Additionally, according to the Center for Economic Advancement, Rhode Island saw the greatest increase in poverty in the nation during the recession, from 10% in 2006-2007 to 12.9% in 2008-2009; could this have potentially been much worse? Are businesses in Minnesota primed to receive an abundant supply of low wage earners that come equipped with federally-supplied health care and won't this eventually support expansion of businesses throughout the state?
If two single adults were working for the same low wage at the same business, one living in Rhode Island without coverage and the other in Massachusetts with coverage, wouldn't the worker without coverage move at the first opportunity especially if they could maintain their position? It is a common occurrence for people who live on a border to take jobs in their neighboring states, employers in Massachusetts regularly employ people who live in Rhode Island. As Rhode Island at this time didn't have Medicaid coverage for single adults, and as this population was most dramatically effected by the change in Medicaid enrollment it would seem to make sense that workers left the state, especially in light of the 2013 Kaiser Family Foundations June tracking poll where the value young adults place on healthcare is illustrated: http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-june-2013/
It appears highly unlikely that some states are going to expand Medicaid as there is no mandate to do so, by not doing so, their border states will reap the same economic gains through the PPACA’s Medicaid Expansion that Massachusetts did.
Expansion makes good sense for businesses, especially those employing low-income workers and it makes good sense for the workers in these positions as well, especially as businesses are unlikely to offer affordable healthcare to their employees and are not mandated to do so until 2015. We have already seen that many businesses would rather reduce hours than give their workers heath benefits. Once one state has this economic advantage they are going to maintain it, a young workforce will move to a border state for a benefit as important as health care, it would be doubtful that they will move back for no obvious advantage and many of the available jobs will have already crossed with them. It will be interesting to watch the economies of the early adopting Medicaid expansion states unfold in comparison to their border states that chose not to increase Medicaid enrollment.
