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WVU study: Medicaid cuts would have deep impact on West Virginia’s economy

WVU Today

WVU’s Bureau of Business and Economics Research director John Deskins said that state cuts to programs that Medicaid funds will take money out of the state’s economy.
(WVU Today photo)

MORGANTOWN, W.Va. — Cutting Medicaid in West Virginia would have substantial economic impact on the state’s economy, according to a study released today by the Bureau of Business and Economic Research in West Virginia University’s College of Business and Economics.

The research was funded by the West Virginia Health Care Association, the West Virginia Hospital Association and the West Virginia Behavioral Healthcare Providers Association. Nearly 30 percent of state residents are enrolled in the program. In 2017, the study said, Medicaid accounted for nearly $3.7 billion in the state’s economy directly.

“The bottom line is that Medicaid has a pretty large effect on our state economy,” said John Deskins, WVU economist and BBER director. “Medicaid injects federal dollars into West Virginia’s economy, so any cuts to the program takes that money out of our economy.”

Deskins said the goal of the study was to look at the economic impact of Medicaid in West Virginia and determine what ripple effects, if any, such cuts would create. Economists looked at a hypothetical $10 million cut to Medicaid in West Virginia, and the result was a reduction of $49 million in overall annual economic output.

“In this study, we took a hypothetical scenario and looked at what would happen if West Virginia would cut Medicaid by $10 million, or around 1 percent,” Deskins said. “Medicaid is a joint program whose funding is shared by the federal and state governments. For every $1 the state puts up for Medicaid, the federal government provides nearly $2.90. Therefore, if the state cuts Medicaid by $10 million, you are immediately taking $29 million in federal funding out of the economy.”

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