PA Hospitals: New Rand Study Demonstrates Medicaid Expansion’s Benefits to Pennsylvania’s Economy, Jobs Climate, Health

Updated on March 29, 2013

Expanding Medicaid coverage in Pennsylvania will boost economic activity by at least $3.2 billion annually and support 35,000–39,000 jobs in the state over the next seven years, according to a new report released today by The Hospital & Healthsystem Association of Pennsylvania (HAP). The report, The Economic Impact of Medicaid Expansion on Pennsylvania, was commissioned by HAP and conducted by RAND Health, a research unit of the RAND Corporation.

The report forecasts several positive effects of Medicaid expansion on Pennsylvania’s economy and citizens:

–        New personal income and gross receipts tax revenue produced by Medicaid expansion will exceed the state’s expansion costs.

–        At least $3.2 billion in annual economic growth ($23 billion through 2020).

–        35,000–39,000 family-sustaining jobs supported.

–        Up to 350,000 additional low-income, non-elderly Pennsylvanians will become insured, dropping the state’s uninsured rate from 12.7% now, to 8.1% under the Affordable Care Act, to 4.8% under the Affordable Care Act with Medicaid expansion in 2016 (the first year of full penalties for non-compliance with the ACA insurance mandate).

“This new report from RAND shows the return on investment that Medicaid expansion produces for Pennsylvania’s citizens, government, and health care providers,” said HAP President and CEO Andy Carter. “This manifests itself in higher rates of insurance coverage, lower rates of hospital bills going unpaid, greater economic growth, increased employment, and—most importantly—timelier health care for up to 350,000 low-income Pennsylvanians who would otherwise have no health insurance coverage.”

Carter noted that even with Medicaid expansion, hospitals will continue to be reimbursed by Medicaid at less than the cost of care.

The RAND report also highlighted a late-2012 study of three states that already have undertaken Medicaid expansion; the study estimated that expansion in Arizona, Maine, and New York produced a decrease in mortality of 568 per 100,000 of those newly eligible for coverage.

“This report reinforces what we have been saying all along—that insured individuals are more likely to receive needed care at the right time in the right setting, and to have preventive screenings, all of which lower future medical costs,” Carter said. “Insured individuals with complex and chronic illnesses are more likely to manage their care, avoiding an escalation of health problems. Healthy adults are more employable and productive.”

“Medicaid expansion would provide substantial benefit to the physical and fiscal health of Pennsylvanians, the Commonwealth, and its hospitals,” Carter said. “We look forward to working with the Governor and lawmakers to provide health insurance coverage to more of Pennsylvania’s most vulnerable citizens.”

HAP is a statewide membership services organization that advocates for nearly 240 Pennsylvania acute and specialty care, primary care, subacute care, long-term care, home health, and hospice providers, as well as the patients and communities they serve. Additional information about HAP is available online a

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