Medicaid Expansion Does Not Create Healthcare Jobs

Ani Turner of the Altarum Institute has examined the growth in healthcare jobs in states which expanded Medicaid versus those which did not expand Medicaid.

States Expanding and Not Expanding Medicaid

This preliminary analysis shows that the recent acceleration in health care job growth should not be attributed primarily to Medicaid expansion, in part because
(1) overall job growth accelerated,
(2) the impact of expanded coverage on demand may turn out to be small compared to other forces, and
(3) an expanded coverage effect may be present in both groups of states to a greater extent than we expected.

It is important to emphasize that this is not a test of whether expanded coverage increases jobs but whether the recent acceleration in health job growth can be attributed to expanded coverage, as measured by Medicaid expansion status.

Ms. Turner’s entire blog entry is a valuable contribution to the debate over the effect of Medicaid expansion. What I found especially interesting is that healthcare job growth in the 12-months before Medicaid expansion was twice as high in the states that expanded Medicaid (14.500) than those which did not (7,400). This suggests that growth in healthcare jobs causes Medicaid expansion, rather than the other way around.

How? States with more healthcare jobs will be subject to more powerful lobbying by hospitals to expand Medicaid. Hospitals want to shift the costs of charity care off their books and onto state and federal taxpayers, which is why they lobby for Medicaid expansion. So, the extra cash flow solves a fiscal problem for hospitals but does not necessarily lead to more healthcare jobs or increased care.

Although, a caveat to this is that Ms. Turner looked at healthcare and social-service jobs overall, not just in hospitals (which I addressed in my entry on the last employment report).


John R GrahamJohn R. Graham is a Senior Fellow at the Independent Institute as well as NCPA. As an expert on individual choice and limited government control over medicine, Graham speaks frequently on health reform on radio and television, and at meetings in the United States, Canada, and Europe.