Report: Medicaid expansion in Tennessee would kill jobs

By Chris Butler | Tennessee Watchdog

NASHVILLE — Interest groups can harp on all day about Tennessee’s supposed need to expand Medicaid under Obamacare.

A new report, however, strongly suggests doing so would kill several thousand jobs in the state and undo whatever economic progress Tennessee has made since the national economy almost collapsed six years ago.

The free market think tank Beacon Center of Tennessee, along with Virginia-based State Budget Solutions, released the report this week, using data from both state and federal governments.

The report said Medicaid expansion in Tennessee would cost each household $1,148 in additional personal income and kill 67,433 private sector jobs.

If true, is that enough to prompt the average Tennessean to furiously demand state officials not expand Medicaid?

“What people will hear in support of Medicaid expansion is that this is free money. It’s coming from the federal government, and it’s not going to cost you a dime and that is the fundamental problem here with the way the debate is going,” study author J.Scott Moody told Tennessee Watchdog.

“It is in fact going to cost you money because when you look across the 50 states many states already expanded Medicaid not because of Obamacare but just as a matter of policy and when you look at those states they aren’t growing like other states.”

Moody said the current system needs reform because there’s “a lot of waste in the system.”

“The problem with Medicaid expansion is that most of the folks put on are able-bodied adults. They don’t fit the profile of the truly needy and that is something that needs to be taken into account.”

Last week, Tennessee Watchdog profiled two cases, among many others, of fraud and waste involving TennCare, the state’s version of Medicaid.

Moody’s report recommends government officials abandon the federal government’s one-size-fits-all approach and focus more on solutions that work best locally.

The report says Tennessee’s private sector has diminished from 92.1 percent in 1929 to 68.6 percent in 2013.

While Tennessee now has the 33^rd largest private sector in the country, expanding Medicaid will bring it down to the 35^th, the report said.

“There is a significant correlation between the size of the private sector and household income,” the report said.

“As a consequence of Obamacare’s expansion of Medicaid, Tennessee’s taxpayers will pay a steep economic price with lower incomes and fewer jobs.”

Medicaid expansion means Tennessee, unlike most of its neighboring states, would become increasingly dependent on Medicaid and that would crowd out the private sector, the report said.

Moody said only the private sector can create wealth and generate new income in an economy.

“Government spending, on the other hand, is the redistribution income first extracted by taxes. Yet, the very process of redistribution comes at a very high economic cost,” Moody wrote in the report.

Contact Christopher Butler at chris@tennesseewatchdog.org

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