How Reducing Medicaid Coverage Will Harm Minnesota

Reducing Medicaid coverage or the number of people on Medicaid would harm Minnesota residents and our state in many ways, including the following.

Reducing Medicaid coverage will make Minnesotans sicker.

Losing Medicaid is associated with an increased rate of death among infants and children (Goodman-Bacon & Nikpay, 2017) and adults (Borgschulte & Vogler, 2020; Maclean et al., 2019; Tello-Trillo et al., 2015). For example, one study found that suicide, fatal alcohol poisoning, and drug overdoses increased significantly after cuts to Medicaid (Maclean et al., 2019). In addition, individuals without healthcare coverage experience more cost-related delays in accessing care for prevention or treatment (Askelson et al., 2019; McIntyre et al., 2024; Tello-Trillo, 2021), delayed or missed medication (McIntyre et al., 2024; Sommers et al., 2020; Tello-Trillo, 2021), and unmet needs for substance use or mental health treatment (Maclean et al., 2019). Conversely, individuals with Medicaid coverage were more likely to report that they have a usual source of care and that their health is good, very good, or excellent (Benitez et al., 2024).

Reducing Medicaid coverage will make Minnesota residents poorer.

Compared to individuals with insurance, uninsured individuals are more likely to go into debt collection (Argys et al., 2020; Doty et al., 2008; Katch et al., 2018; Sommers et al., 2020); spend down their savings (Doty et al., 2008); and report difficulty paying for necessities, such as food, shelter, or utilities, because of medical debt (Carlson et al., 2006; Doty et al., 2008). On the other hand, Medicaid coverage is linked to decreased evictions (Ali et al., 2024; Tello-Trillo et al., 2015), as well as reduced bankruptcies, lower debt in collection, and improved credit scores (Argys et al., 2020). These consequences affect consumers’ future buying power by decreasing interest rates or increasing access to loans.

Currently, Minnesotans have higher average credit scores (Equifax, n.d.), lower medical debt (Blavin et al., 2022), and a lower rate of bankruptcies compared to other states (American Bankruptcy Institute, 2024). Reducing Medicaid coverage could take away these important protections.

Reducing Medicaid coverage will make Minnesota poorer.

Several studies have shown that Medicaid grows workforce participation among enrollees due to better-managed health conditions (Katch et al., 2018; Shinn & Martin, 2020; Wen et al., 2019). Other states who have expanded Medicaid (e.g., Louisiana, Colorado, and Kentucky) have created tens of thousands of new jobs, including many outside of the healthcare industry (Shinn & Martin, 2020). This increased tax revenue dramatically in these states and reduced state costs associated with unemployment. Medicaid has also created inter-generational workforce contributions (Goodman-Bacon & Nikpay, 2017). When a child grows up in a household with insurance coverage, the child tends to have better health, higher employment, and lower use of public benefits when they are adults.

In addition to this increased tax revenue, Medicaid reduces other costs to the state, such as uncompensated or unpaid health care (Shinn & Martin, 2020), mental health and substance use treatment costs (Ward, 2020), and evictions (Tello-Trillo et al., 2015). In addition, Medicaid coverage has been shown to reduce social challenges, including crime and child neglect, which require spending in other law enforcement and social service areas (Tello-Trillo et al., 2015). When the state needs to spend more on healthcare and related systems, that leaves less to spend in other important areas, such as education, transportation, public safety, and housing.

One study found that the estimated economic value of reducing mortality through Medicaid coverage alone would be enough to offset the entire cost of expanding Medicaid (Borgschulte & Vogler, 2020).

Reducing Medicaid coverage will weaken our health care system.

Other states have seen that Medicaid expansion has increased the financial performance of hospitals, especially in rural areas, and prevented the closure of hospitals (Ammula & Guth, 2023; Shinn & Martin, 2020). As hospitals in rural areas are both important community resources and top employers in Minnesota, closures are particularly impactful.

In addition, Minnesota has several safety-net hospitals that provide care to individuals regardless of their insurance coverage or ability to pay. Safety-net hospitals in states that expanded Medicaid coverage saw increased numbers of patients, decreased unpaid care, and improved finances. These improvements helped hospitals serve more patients, improve care coordination, grow their staffing, and invest in infrastructure that helped reduce long-term costs (Dobson et al., 2017).

Reducing Medicaid coverage will harm Minnesota in the future.

In addition to harming our residents, our state budget, and our healthcare infrastructure now, many of these challenges will continue to hurt Minnesota in the future. Specifically, Medicaid reductions would limit Minnesota’s ability to respond to changes in our population, including our growing and aging population, and emerging health needs of our people, including during any future public health emergencies (like COVID-19 or the measles outbreak) (Weeks, 2017).