Feb 4, 2014
Private Option Won’t Work: Who’ll Pay?
Medicaid expansion in Arkansas — the “private option” — is on the table again, and facts are hard to come by, partisan rhetoric being more likely to get press coverage and all. But the fiscal facts are hard to dispute, and they point down an unsustainable path. The Legislature’s commissioned study from the Alexander Group...
But the fiscal facts are hard to dispute, and they point down an unsustainable path.
The Legislature’s commissioned study from the Alexander Group shows clearly that after the expansion, the number of Arkansans on Medicaid will exceed the number of Arkansans working in the private sector.
In fact, Arkansas already sits on the low side of the workers-to-welfare ratio before the expansion:
According to the U.S. Bureau of Labor Statistics, total employment in Arkansas was 1,176,400 in 2011-12. This gives us the following ratio: each employed Arkansan supports 0.94 recipients on welfare.
Most states that we have looked at enjoy a significantly higher number of employed individuals relative to those receiving welfare benefits; our preliminary national estimate suggests between 1.8 and 2.0 workers, depending on the total employment measure used.
This means the burden is significantly heavier in Arkansas. The private employment metric further illustrates a disproportionately high welfare burden in Arkansas.
For each privately employed Arkansan, we estimate 1.15 persons receiving some form of welfare assistance.
Even without expansion, Arkansas’s Medicaid expenditures will more than double over the next ten years! And — even without expansion — current spending trends show Arkansas will still need an additional $15.9 billion in revenue in 10 years to meet all our other budget demands (such as education).
Where do you think the money will come from?
Arkansas Simply Cannot Afford the Private Option!