MTPR

Republican Response Muted To New Medicaid Expansion Economic Report

Jan 28, 2019

When Republican state lawmakers heard an updated economic report yesterday that says Medicaid expansion grows Montana's economy, they didn't have a lot of questions, or push back much against the findings.

"The big numbers are roughly 6,000 jobs, roughly $350 million of personal income, $420 million of gross state product," Economist Bryce Ward said at the state Capitol yesterday, presenting a follow-up to his April study on Medicaid expansion.

The Legislature in 2015 voted to expand the government funded heath coverage program, as offered by the federal government through the Affordable Care Act. Both of Ward's analyses were commissioned by the nonprofit Headwaters and Montana Health Care Foundations.

"Those are reasonably-sized numbers," Ward said, "that's about one percent of Montana's economy. That's pretty big, there are several counties we can think of that are about that-sized."

Medicaid expansion is set to expire in Montana this summer unless lawmakers vote to re-authorize it. It covers roughly 100,000 people statewide. The federal government pays about for 90 percent for that, with the state picking up the rest, an amount expected to hit around $63 million annually next year.

But, Ward says, the actual hit to the state's general fund will be a lot smaller, in part because the state saves money because as Medicaid now absorbs some substance abuse treatment costs and health care for prisoners. 

"So that reduces the cost of the expansion by around roughly half," he said. "And then we of course, as I mentioned earlier, get a whole bunch of new jobs, and then the tax revenues associated with those new jobs, and combined they add up to more than enough to pay for Medicaid expansion."

Ward spoke at a meeting the health care foundations invited lawmakers to, and it drew at least eight Republicans. Legislators only asked a couple of questions, although one told Ward after the meeting that they didn't believe his analysis was true. Kalispell Senator Al Oszewski asked for details on Mediciad expansion leading to lower crime rates, Ward said there have been studies showing that in other states, but that he does't have good numbers on Medicaid and crime for Montana.

Hungry Horse Senator Dee Brown questioned Ward on this assertion: "Labor force participation ... went up by about three percentage points after Montana expanded Medicaid," Ward said.

That's just among people eligible for Medicaid, who have incomes of about $17,000 a year or less.

Senator Brown asked if there might be something besides expansion that accounted for that rise.

Ward said he checked, and the numbers say that outside of Montana workforce participation by low income people went down, and, "if you look at the labor force participation of higher income Montanans over the same period, it also went down."

Which Ward says suggests there's something about Montana's Medicaid expansion that drives employment.

Jobs have been a big sticking point in Montana's Medicaid expansion debate since at least 2015, when Republicans asked that Medicaid recipients be required to work in return for benefits. The Obama administration shot down that request. Instead, Montana's 2015 Medicaid expansion law connects recipients with state Department of Labor, which helps those who want help with assistance looking for work and developing job skills.

"And when they passed it, I was like, oh that's nice. That's kind of - ok, great," Ward said. "I didn't have any hope that it would really do a whole lot. But then we sat down and we looked at the data and I was like, wait, wait a second, what's going on here?"

Ward concluded that the voluntary job assistance Montana offers really makes a difference.

A Republican bill to continue Medicaid expansion is in the works, but hasn't been made public yet. Party leaders have said they want an actual work requirement this time. They've also said that the roughly 100,000 Montanans getting expanded Medicaid benefits now is more than was envisioned when the 2015 law was passed, and that they'd like to find a way to reduce that number.

A Democratic bill to make the current Medicaid expansion permanent has been announced by Helena Representative Mary Caferro, but has not yet been formally introduced.