Report Says Alaska Will Lose
300 Jobs Due to Medicaid Cuts
April 29, 2008
Washington, D.C. - Medicaid rule changes put in place by the
Bush Administration will cost Alaska more than $88.2 million
in federal funds over the next five years according to a national
organization for health care consumers. The cut in federal funding
will, in fact, act like a giant anti-stimulus package says a
report released today by Families USA. Those lost Medicaid funds
will eliminate an estimated 300 jobs and an accompanying $12
million in wages, and, even worse, cost the state an estimated
$32.9 million in lost business activity.
Virtually all that economic pain comes in the first year of implementation,
when Alaska would fail to receive approximately $17.4 million
in Medicaid payments, says the report. Titled "Bad Medicine,"
the report analyzed the economic impact of seven new Medicaid
regulations that were issued in 2007.
"The devastation caused by the Administration's cuts will
affect millions of people who rely on Medicaid for their health
lifeline. This will be tragic for their families," Ron Pollack,
Executive Director of Families USA, said today.
"Additionally, these cuts will harm state budgets at the
worst possible time. These cuts in federal Medicaid payments
will have a ripple effect through state economies that are already
struggling during this economic downturn. This economic harm
will increase the number of people who may need Medicaid, as
hundreds of Alaskans see their paychecks being cut or their jobs
"This lost business activity in Alaska will hurt business
and industry, and it will force governors and state legislators
to make increasingly difficult choices about providing state
services," Pollack said. "This Bush Administration's
decision is ill-timed and ill-considered, and it should be reversed
The seven regulation changes issued by the Bush Administration
in 2007 and imposed on states without congressional review
or debate restrict funding for a variety of Medicaid services,
including rehabilitation services, school-based transportation,
as well as Medicaid administrative services, such as outreach,
enrollment, and case management. The seven rule changes are now
either under a congressional moratorium or awaiting implementation.
The Families USA "Bad Medicine" report for Alaska is
based on the latest version an economic modeling tool known as
the Regional Input-Output Modeling System, or RIMS II. Developed
by the U.S. Department of Commerce, RIMS II has been used extensively
for a variety of major projects calling for economic projections,
such as military base closures, hospital and airport expansions,
and the impact of natural disasters on regional economies.
"There is a multiplier effect when dollars stop coming into
a state like Alaska," Pollack said, "and whether Alaska
loses funding because a business has closed or because a federal
agency has reduced funding for a state program, the impact is
the same-there are fewer dollars on the move in the state,"
"As our analysis makes clear, allowing these regulations
to be implemented would be bad for Alaska's families, who will
need the Medicaid safety net more than ever in the coming months,"
he said. "It is also the wrong choice for Alaska's economy,
which will be dramatically weakened by these cuts."
All 50 states are affected by the Medicaid rule changes, Pollack
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