Background
The Medicaid program is expected to be heavily impacted by deficit reduction efforts underway by Congress. The related program funding reductions will produce economic consequences beyond the fact that fewer people within the state will have access to health care. At the present time, there are reduction targets but no single proposal for how the funding reductions will be achieved. Therefore, states can only examine scenarios related to how the reduction in Medicaid funding could impact their economies.
Synopsis of Economic Findings
This analysis quantifies the economic losses that will be realized by the state of Arizona under multiple spending reduction scenarios. The first scenario is the most user friendly in that it calculates the economic losses associated with each $1.0 billion reduction in Medicaid spending in Arizona.
This means that when the federal government produces a formal proposal, the economic consequences can be expanded to match the proposed spending reduction. For example, if it is estimated that the spending reduction by the federal government in the state of Arizona will equal $10.0 billion, the economic values associated with the aforementioned increment will need to be expanded tenfold. 1
