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Could Delaware’s “Keystone Growth Industry” Also be Hurting the State Economy?

Healthcare typically is a necessity, not a want, and therefore remains a constant driver of our state and national economy.

While Delaware’s businesses earnings increased 8.4% from 2006-2016, health care earnings surged by 64.2% in the same period. Delaware’s health care industry earnings for 2016 were $4.3 billion—almost equivalent to Governor Carney’s 2020 budget.

The numbers look promising, but a staggering 95% of those earnings are from government provided health care insurance, making Medicare and Medicaid the top players. Medicaid, both a federal and state program to assist with medical costs and cover lapses in Medicare, is the single largest line item in the state budget.

Instead of being an economic driver, this turns health care into a major concern for future state spending. If this market continues to boom, so will the costs that Delaware burdens from it. The potential for another budget shortfall becomes immense and many routes to combat this are a detriment to Delaware businesses and families, such as increased taxes and fees or cuts in other critical areas.

Over the past decade, Medicaid spending in Delaware rose at twice the rate of the General Fund revenue. Eventually this bubble will burst, and the same people who sank us will be tasked with raising us up once again.

We can hope that they do better this time, or the next, but insanity is repeating the same thing, or electing the same people, and expecting different results each time.