Unsafe Staffing From Medicaid Cuts

Health Affairs reported that Republican cuts to Medicaid will cause nearly 16 million Americans to lose healthcare coverage and risk job loss for hundreds of thousands more. The law includes $700 billion in cuts to Medicaid that will devoid hardworking Americans of access to care when they need it most. The source for these massive losses can be found in Medicaid cuts, as well as in changes to the Affordable Care Act Marketplaces, and the expiration of enhanced premium tax credits for Affordable Care Act plans.

Moreover, an increasingly large segment of the private-sector workforce will be hit hard; data from the Bureau of Labor Statistics captures the underlying importance of Medicaid to the job market. In fact, “Services for the elderly and persons with disabilities” is found to be the single largest private-sector industry. This comes with about 2 million jobs being added to the labor market, which is even more significant considering that the second largest growing industry is “General warehousing and storage” which has added only 1.2 million jobs.

This industry’s growth is attributable to Americans’ growing dependence on Medicaid to afford long-term care—not just for older adults, but for people with intellectual or developmental disabilities too. Right now, Medicaid is easily the U.S.’s largest payer of long-term care services and supports (LTSS), as it pays for nearly half of the country’s LTSS needs.

LTSS includes care offered in various centers such as nursing homes, assisted living facilities, and even some home and community-based services (HCBS)–which are brought to adults in their own homes or communities. Every state has seen the advantages of such programs and has chosen to cover at least some HCBS benefits, despite them not being required in their state Medicaid programs.

This embracement of HCBS over time has also opened up more jobs in the LTSS industry. However, with the enactment of this bill, states will be given three options of where to cut Medicaid: cut optional benefits like HCBS, cover fewer people (decrease eligibility), or pay doctors and hospitals less (decrease provider rates). HCBS are usually one of the first programs to be cut, as they were during the Great Recession in 2010 and 2012. Now, cutting HCBS would put more than 2.6 million jobs at risk.

The White House Council of Economic Advisors (CEA) ignores the reality that Medicaid spending is closely tied to job growth—the more Medicaid is cut, the more jobs are lost in the U.S. This effect is expected to be devastating.

To put things into perspective, the CBO estimates that by 2030, about 7 million people will use HCBS-type programs and 2 million will use services available in institutional settings. Additionally, the HCBS industry alone is expected to grow by 39% between 2022 and 2037.

If this is not alarming enough, it’s important to remember that the U.S. must add about 150,000 jobs to the economy every month in order to maintain “full employment”. Yet, while the rest of the nation seems to be offering less and less jobs, the industries that offer the most jobs are being cut. The health care and social assistance industry alone is known to account for more than half of total payroll growth over the past 16 months. In just HCBS, 2.6 jobs would be eliminated, losing 18 months of “full employment” monthly job growth.

With the oncoming political changes, Americans should be wary of this wipeout of opportunities and try to secure a stable job before the opportunity is taken away. Such cuts are expected to eliminate years of growth and economic strength, all while supposedly trying to “help” the economy.