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 The leading web portal for pharmacy resources, news, education and careers October 24, 2016
Pharmacy Choice - Pharmaceutical News - Medicaid expansion will sting Utah's economy [Deseret News (UT)] - October 24, 2016

Pharmacy News Article

 9/16/14 - Medicaid expansion will sting Utah's economy [Deseret News (UT)]

You don't need a Ph.D. in economics to recognize that tradeoffs exist in any economic decision. We can assume that BYU economist Sven Wilson, by praising the Healthy Utah plan, must believe that no trade-offs exist. The research on Gov. Gary Herbert's proposal proves otherwise.

A new report published by the Federalism in Acton Project (FIA) definitively shows that Medicaid expansion will reverse the recent post-recession growth in Utah's private sector. This means two things for Utah families: they will bring home less income and will suffer from the loss of private sector jobs.

Medicaid expansion looks like a "free" way to expand the economy, but consider that the funding comes from you, the taxpayer, and is not the result of new economic activity. Government spending "crowds out" economic activity in the private sector. This is a problem, as the private sector alone generates new income, while government spending is a mere redistribution.

Herbert estimates Healthy Utah will cost $258 billion in the first year. The funds come from redistributed taxpayer dollars via the federal government. Based on FIA's calculation, the expected downshift in personal income growth would amount to $749 million.

This downshifting will manifest itself in two very problematic ways - lower household income and fewer jobs. If these problems were mutually exclusive, it would mean Utah residents will see $805 less personal annual income for all households or the loss of 14,125 private sector jobs.

Reality will fall somewhere in between, resulting in job and income loss that will hurt all Utahns.

This economic downturn would come on top of the already devastating trend of increased government spending devouring the private sector. Utah's private sector has shrunk by 21.6 percent to 72 percent in 2013, down from 91.9 percent in 1929.

Healthy Utah is Obamacare's Medicaid expansion by another name. Economists and policymakers often ignore the significant unforeseen financial costs. In this case, the costs clearly outweigh the supposed gains from an influx of federal dollars

FIA's research highlights the trade-offs in accepting the Healthy Utah plan and sheds light on the economic problems that will result. The trade-offs are real and the consequences are steep. Utahns deserve better.

J. Scott Moody is the CEO of State Budget Solutions, a nonpartisan, nonprofit, national public policy organization with the mission to change the way state and local governments do business. Moody has worked as a public policy economist for over 17 years and is the co-author and editor of 154 studies and books. He has testified twice before the House Ways and Means Committee of the U.S. Congress as well as various state legislatures.

(c) 2014 ProQuest Information and Learning Company; All Rights Reserved.

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