New Research: Medicaid Expansion Would Cost NC Nearly 94,000 Jobs

One of the reasons used by advocates of Medicaid expansion in NC is that expansion will be an economic boost, creating tens of thousands of jobs. That claim, however, was based on a foundation of completely false assumptions – as I discussed last month in this article.

But that’s not all. Research, and common sense, tells us that expanding Medicaid will also reduce participation in the workforce. For North Carolina, that could mean a loss of nearly 94,000 jobs. Because Medicaid expansion primarily reaches working-age childless adults, it creates a new “welfare cliff”, meaning that new enrollees may face losing significant benefits if they take a job. The prospect of losing these benefits makes work even less attractive, and causes more people to choose to stay unemployed and not risk losing their Medicaid benefits. This Forbes article describes the details of the research:

But the truth is that expanding Medicaid to able-bodied adults will discourage work, create massive new welfare cliffs and ultimately shrink the economy, not grow it. A new report by the Foundation for Government Accountability outlines how Obamacare expansion could affect the labor force.

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A comprehensive study released by the National Bureau of Economic Research, for example, found that past Medicaid expansions to enroll able-bodied, childless adults reduced the likelihood of working by up to 10 percentage points. This means Obamacare’s Medicaid expansion could cause up to 2.6 million Americans to drop out of the labor force entirely.

Analysis of these figures shows that NC would lose nearly 94,000 jobs under Medicaid expansion. A CBO study also indicates Medicaid expansion will discourage work, and academic research on states that have expanded Medicaid finds Medicaid expansion causing decreases in employment as well.