Ryan's Medicaid cuts would be devastating to state's economy

Paul Ryan’s proposed Medicaid cuts could put more than 30,000 Wisconsin jobs at risk, and cost the state $3.4 billion in business activity.

That's a worst case scenario, if Medicaid spending were cut 33% in 2011.  But smaller cuts would also have a big  negative impact on the state's economy.

Implementing a 5 percent cut in Medicaid spending in 2011 would: cost Wisconsin almost $250.8 million in federal Medicaid dollars, and put at risk nearly $519.3 million in business activity and 4,830 jobs;

A 15 percent cut in federal Medicaid spending in 2011 would have cost Wisconsin nearly $752.4 million in federal Medicaid dollars, and put at risk nearly $1.6 billion in business activity and 14,490 jobs;
Those numbers from a new report, Jobs at Risk" by the national health care consumer organization Families USA:

The Republican budget proposal, introduced by House Budget Committee Chairman Paul Ryan, would subject Medicaid to some of the largest cuts in the history of the program. This proposal would cut federal Medicaid funding significantly—not by reducing underlying health care costs, but simply by shifting those costs to already overburdened state governments. It would do this by converting the program to a block grant that would provide considerably less federal funding with each passing year. The Republican budget proposal would cut federal funding to the states by 5 percent in 2013. In 2014, the cut would be 15 percent. Over the coming years, these funding cuts would get larger and larger, until, at the end of the 10-year period, the cut in federal funds would approximate 33 percent.

The report's conclusion:

As options to reduce the federal deficit are weighed and balanced, the discussion should

include recognition of the powerful economic stimulus that federal spending has on state Medicaid programs. This report quantifies the potential business activity and jobs that would be put at risk if federal Medicaid spending is cut dramatically. Less easily quantified, but equally important, is the impact on the lives of state residents who rely on Medicaid for their health care. Medicaid provides a vital health care safety net in every state. It is a lifeline for children, people with disabilities or chronic illnesses, and low-income elderly people. It is there to help families that have been hit by job loss or other unexpected economic hardships. And Medicaid is the only source of financial help for millions of families who are struggling to pay for nursing home or other long-term care for parents or family members.

Medicaid is good medicine for state economies and for families as our nation recovers from the recession. This is exactly the wrong time for Congress to cut a program that stimulates the economy while also providing a boost to individuals and families who are facing hard economic times.