Expanding the state’s home health care program for low-income elderly and disabled residents would require $13 million in state expenditures, but would generate almost $80 million in economic activity across West Virginia and support more than 1,000 jobs.

A study on the Medicaid Aged and Disabled Waiver (ADW) program by the Bureau of Business and Economic Research at West Virginia University’s College of Business and Economics found that despite the state’s tight budget, state funding of $13 million for the program would have a significant impact.

The ADW program currently serves more than 7,000 West Virginians, with an additional group of more than 2,000 applicants waiting to enter the program. The study estimated that an additional $13 million in state spending, along with matching funds from the federal government, could clear that waiting list. Moreover, the economic activity associated with this new spending would bring in approximately $1.5 million in additional tax revenues that would offset about 12 percent of the state’s costs.

“Our research indicates that the aged and disabled waiver creates significant economic benefits for the state of West Virginia, in addition to the direct benefits it provides,” said Dr. John Deskins, BBER Director. “However, we also understand that resources are very tight in West Virginia at the moment. Our hope ultimately is that our research will help enable our government leaders in their decision making to spend our valuable tax dollars as wisely as possible.”

Funding for the research was provided by the Joint Committee on Government and Finance of the West Virginia Legislature. The purpose of this report is twofold: to estimate the annual impact on West Virginia’s economy of the spending associated with the ADW program given its current utilization, and to estimate the additional impact that expanding the ADW to accommodate the more than 2,000 individuals waiting to enter the program would have on West Virginia’s economy.

The study also examined the economic impact of the ADW program overall. For fiscal year 2012, expenditures for the ADW program were approximately $163 million, of which the state paid $47 million and the balance was funded by the U.S. government. In completing its research, BBER estimates indicate that this spending generates significant economic benefits for the state of West Virginia. Some of the report’s highlights include:

• Current ADW spending generates a total of $285 million in business volume for the state of West Virginia annually
• ADW spending supports approximately 3,665 jobs in the state and generates nearly $121 million in employee compensation annually
• Business volume and employee compensation associated with the ADW generates approximately $5.5 million in total tax revenues for the state each year, offsetting the original $47 million expenditure by approximately 11.5 percent.
• Net spending by the state on the ADW program ($47 million in gross spending minus $5.5 million in new tax revenues) generates an overall impact on business volume of nearly $7 for every dollar spent
• One job is supported for every $11,400 of state ADW spending

To view the study, go to be.wvu.edu/bber. For further information on the College of Business and Economics, please visit be.wvu.edu.

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