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Wednesday, June 29, 2011 - 12:48pm

Report: Medicaid Cuts Will Hurt Economy

Cutting Medicaid could hurt Georgia’s economy as well as its poor and disabled residents.

Medicaid spending is one of the areas targeted in negotiations over reducing the federal budget deficit. Health care advocacy group Families USA says a 5 percent reduction in Medicaid funding could put $670 million in economic activity and 5,800 jobs at risk in Georgia.

“Every federal Medicaid dollar that flows into a state stimulates business activity and generates jobs,” said Ron Pollack, Families USA executive director. “Cutting Medicaid funds not only hurts seniors, people with disabilities, and children who count on the program as their lifeline, but it also results in fewer jobs and stunts the economic recovery.”

A new report from the organization found the impact in Georgia would be even more severe with a 15 percent cut in Medicaid funding: $2 billion in business activity and more than 17,000 jobs lost.

Georgia will spend nearly $7.5 million in federal and state money on Medicaid this fiscal year to serve roughly 1.5 million Georgians.

State Medicaid officials wouldn’t comment about the report, but said they are planning reduced reimbursements in anticipation of federal cuts. They also said they’re cutting costs this year by raising co-pays.

Pollack said cutting Medicaid means those federal dollars can’t be multiplied throughout the state’s economy.

“You’d have fewer nurses hired, fewer home care workers who are hired. But in turn, those folks would have less of an ability to purchase other consumer goods, whether it’s a television set, an automobile, a dishwasher,” Pollack said.

“So it’s that multiplier effect,” he said.

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