Study shows impact of budget cuts on people, jobs
By Albert de Zutter
Catholic Key Editor
KANSAS CITY - Medicaid federal matching funds to the State of Missouri in 2004 generated $5.82 billion in economic activity and supported almost 80,000 jobs in 2004, according to a study by three St. Louis University economics professors.
The study preceded the announcement of Gov. Matthew Blunt's budget seeking massive cuts in Medicaid and related programs, but includes an analysis of the impact of last year's much smaller proposed cuts by the Missouri House.
The report, released Feb. 10, stated that while Medicaid's primary purpose is to provide health care for low-income people, Medicaid and the State Children's Health Insurance Program (SCHIP) "have a substantial economic impact on state and local economies."
Its authors are Joel D. Ferber, Heather Bednarek and Muhammad Islam.
Federal matching funds "are an important source of funding for hospitals, doctors, pharmacists and nursing homes in every part of the state," it said, "which, in turn, leads to economic ripple effects as these health care providers pay rent, purchase food, pay taxes."
The Missouri Department of Social Service projects that 48,541 adults will lose health coverage immediately under the proposed budget cuts with another 40,505 losing coverage after a transitional period. Those who would lose a variety of services would bring the total to 122,527, with the possibility of many more people eventually being affected. Included among those who would lose coverage are the following:
Disabled workers - 9,529 would lose coverage immediately; 4,753 others would pay more before coverage kicks in, and 3,513 who would lose coverage under this program would retain some benefits under other programs.
General Relief - 3,046 would lose coverage immediately.
Transitional coverage for people moving from welfare to work - 1,150 would lose coverage.
Permanently and totally disabled - 14,607 would lose coverage immediately, 18,504 would have to pay more, and 6,741 would retain some benefits under other programs.
Benefits based on income - 20,209 would lose coverage because their income would exceed the new lower limits, and 40,505 more would lose coverage within a year. The new limits would be set at 30 percent of the federal poverty level instead of the current 100 percent. At 30 percent the income limit would be about $289 a month for a single person and about $450 a month for a family of three.
The budget would eliminate programs for in-home care for shut-ins, personal assistance for people unable to care for themselves, and First Steps, which provides therapy and treatment for disabled children under age 3. In addition, a habilitation center and three supported living centers would be closed.
Programs that would be reduced include early childhood learning, mental health research and training, community-based alcohol and drug abuse treatment, and community-based psychiatric care.
While the St. Louis University's study did not anticipate the governor's budget proposal, it did measure the impact of the far smaller cutbacks proposed in the 2004 legislative session. Those cuts in Medicaid and SCHIP eligibility, and service cuts, would have caused Missouri to lose more than 2,049 jobs, $150 million in economic activity, $73 million in wages and $5.4 million in tax revenue based on wages. That proposal would have cut off coverage for 48,000 adults and 20,000 children as compared to the 122,527 adults who would be affected by the current proposal and the roughly 8,100 children in the First Steps program.
The savings to the state from four of the Medicaid-related programs - adults, the elderly, those on general relief and the working disabled - would total $63.6 million, according to an estimate by Mike Hoey, associate director of the MCC, while the loss in matching federal funds would total $219.7 million.
The St. Louis University report shows the economic impact of last year's proposed cutbacks of $48 million on a county-by-county basis. It would have cost Jackson County 210 jobs and $16.7 million in economic activity. The effect in Buchanan County, which includes St. Joseph, would have been 29 jobs and a $2.1 million reduction in business activity.
In St. Louis and St. Louis County the impact would have been 381 jobs and $29.7 million.
The overall positive effect of Medicaid and SCHIP spending in 2004 on counties in the Diocese of Kansas City-St. Joseph in terms of business activity and jobs reported in the study:
Andrew, $9.6 million and 246.
Atchison, $7.3 million and 149.
Bates, $13.8 million and 301.
Buchanan, $82.3 million and 1,129.
Caldwell, $5.5 million and 127.
Carroll, $8.9 million and 206.
Cass, $43.5 million and 834.
Clay, $86.6 million and 1,151.
Clinton, $10.5 million and 207.
Daviess, $4.6 million and 104.
DeKalb, $6.2 million and 149.
Gentry, $7.1 million and 153.
Grundy, $10.2 million and 198.
Harrison, $9.6 million and 240.
Henry, $20.9 million and 347.
Holt, $3.7 million and 79.
Jackson, $650 million and 8,173.
Johnson, $25.6 million and 526.
LaFayette, $37.1 million and 762.
Livingston, $14.9 million and 300.
Mercer, $1.9 million and 37.
Nodaway, $10.4 million and 212.
Platte, $23.3 million and 364.
Ray, $12.5 million and 227.
St. Clair, $8.2 million and 200.
St. Louis, $609 million and 7,618
Vernon, $38.2 million and 748.
Worth, $1.7 million and 31.
St. Louis City, $547.6 million and 7,213.