Medicaid cuts: Worries and consequences

A new economic impact report released by the Arizona Chamber Foundation reveals that proposed federal cuts to Medicaid funding could have severe and far-reaching consequences for Arizona’s economy, health care system and workforce, particularly in rural areas and among small businesses.

The report, conducted by Rounds Consulting Group, finds that for every $1 billion reduction in Medicaid spending, Arizona stands to lose: 

• More than 36,000 jobs across multiple sectors
• $1.7 billion in labor income
• $3.7 billion in total economic activity
• $138 million in state and local tax revenues 
  

Medicaid is a key component of Arizona’s health care system. It provides insurance coverage for more than 2 million residents through AHCCCS or the Arizona Health Care Cost Containment System. Nearly three-quarters of AHCCCS’s $21 billion annual budget comes from the federal government. In several counties, particularly rural counties, close to 50% or more of the population relies on AHCCCS. 

Danny Seiden, President of Arizona Chamber of Commerce and Industry, joined “Arizona Horizon” to discuss these worries and what’s next.

“Medicaid is the federal program that assists people of a certain income level with their health care costs at the most basic level. At our state level, what you have is an exchange, here we call it AHCCCS and that’s our state-run Medicaid program, we get our federal dollars, and that helps to cover certain vulnerable populations,” Seiden said.

Regarding the study that Seiden and the Rounds Consulting group produced, the goal was to find the impact on Arizona’s economy if there were to be federal cuts to Medicaid. Seiden said some questions that related to the conclusion were, “What is the sector of our population covered by Medicaid? If they are no longer covered, who’s making up that cost? Or where does that cost shift to?”

Seiden said he believes Arizona is open to reforms regarding Medicaid, and he could see a recession in the U.S. if Medicaid were to be cut.