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Obamacare Leads to Increased Economic Activity on State Level

Posted on December 18, 2012 by admin

In the 2012 fiscal year, state-level expenditures decreased by 1.1 percent. They increased by 2.2 percent in 2013. Since the recession, state spending has been curbed, oftentimes forcing states to scale back important programs. However, as a report released by the National Association of State Budget Officers indicates, states are headed in the right direction.

In 2014’s fiscal year, state-level spending has increased by 5.7 percent. This is the fastest increase since before the recession, and Obamacare is at the center of the upturn.

Executive of the National Association of State Budget Officers Director Scott Pattison stated “the increase seen in total state expenditures is heavily tied to increased federal Medicaid funds.” These states are not experiencing significant economic growth because of their own fundraising. It is the Affordable Care Act and the monies provided by expanded Medicaid programs that are allowing them to spend their funds on other important areas, such as education or state infrastructure.

The NASBO study reveals that states spend an estimated 25.8 percent of their funds on their Medicaid programs. State expenditures on Medicaid exceed those on K-12 education, higher education, transportation, corrections and public assistance. As a matter of fact, the report shows that Medicaid is second only in state expenditures to miscellaneous “all other” spending.

With the implementation of Obamacare and the Medicaid expansion, Medicaid programs have received an additional $41.8 billion. With these added funds, prioritization has become much easier for states that were struggling to stay within their budget. These states can now focus their funds on all other categories and slightly decrease their focus on the government medical program, and that is exactly what is happening. The result is a growing economy that inches closer and closer to stability after a difficult recession. Even in the midst of calls for repeal, the effects of Obamacare continue to reveal the positives of the healthcare law, both fiscal and social.