A new report issued by the health care consumer organization Families USA indicates that states cutting their Medicaid programs would cause large reductions in jobs, wages, and business activity. Entitled Medicaid: Good Medicine for State Economies, the report says states stand to lose an average of 37 jobs for every $1 million cut from the Medicaid program in 2003 and that, on average, each $1 million reduction in Medicaid spending would cause a loss of $3.4 million in business activity.

"When states slash their Medicaid programs, they hurt everyone through losses in jobs, wages, and economic activity,Ó said Ron Pollack, Executive Director of Families USA.

The Families USA report also focuses on how state money invested in the Medicaid program in 2001 translated into new jobs, additional business activity, and increased wages for all 50 states. According to the report, state Medicaid spending in 2001 generated over 2.9 million jobs—approximately 58,785 jobs on average per state—with 300,352 jobs created in New York State alone.

Families USA used the RIMS II input-output economic model created by the U.S. Department of Commerce, Bureau of Economic Analysis, to determine the impact of Medicaid spending on each state's economy. A copy of the report can be downloaded at www.familiesusa.org.