This week is the deadline for the Montana House and Senate to pass a Medicaid expansion bill from one chamber to the other. As business leaders deeply committed to the health of Montana’s economy and work force, we strongly support accepting federal funds to expand eligibility for the state’s Medicaid program. While there are several reasons for our support, we want to emphasize one – the substantial, positive and longterm impact on economic growth and job creation that Medicaid expansion will produce in comparison to the investment required by the state.
The independent Montana Bureau of Business and Economic Research has produced a thorough, well-supported and thoughtful economic analysis of the potential economic ramifications of Medicaid expansion in Montana. The essential findings of the analysis are these:
• Over the first eight years, expansion would bring approximately $6 billion of new funds into the state – on average, roughly $750 million per year.
• Montana would very quickly create and sustain 12,000 to 14,000 new high-paying jobs. To place that in context, that’s 30 percent more than the existing total mining and logging jobs in the state.
• Montana would provide health care insurance, and all the health and societal benefits that come with it, to approximately 60,000 to 70,000 Montanans.
And what does Montana need to contribute to receive these substantial economic benefits for our people? For the first three years, federal funding would cover 100 percent of the costs, other than relatively small administrative costs. Over the first eight years, we need to contribute roughly $70 million per year. However, based on the Bureau’s analysis, between reduced uncompensated care costs and increased state and local tax revenues from the expanded economic activity, the net present value cost to Montana is roughly… $0.
In our businesses, we make investment decisions every day based on cost/benefit analysis and return on investment. As a business decision, the proposed expansion of Medicaid clearly makes sense.
We also believe there are other business reasons to support expansion. Most Montana businesses incur substantial costs in order to offer health insurance to their employees. Those costs are driven higher for businesses because we all pay part of the price for uncompensated care for the uninsured. In 2011, Montana health care providers were uncompensated for over $400 million worth of health care to the uninsured. That uncompensated care results in cost-shifting to businesses, taxpayers and individual consumers of private insurance. Expanding eligibility to Medicaid would reduce uncompensated care by approximately $104 million from 2014 to 2021. The result: lower health care costs for all of us.
We appreciate that the Affordable Care Act is controversial and was opposed by many. How we pay for and deliver quality health care to our citizens will continue to be one of our greatest challenges and the topic of considerable discussion and debate. Undoubtedly, the dialogue will continue, and the public and private solutions to our health care needs will evolve. If and when those changes occur, our state and our businesses will need to respond and adapt.
However, at present the Affordable Care Act is the law of the land. Our businesses and citizens will pay the incremental taxes and penalties imposed by the act irrespective of whether Montana opts in to Medicaid expansion. It would be especially unfair and illogical for Montanans to pay their fair share of these costs, and be denied the benefits we have helped fund.
Lawmakers on both sides of aisle have often and sincerely pledged that jobs and the economy are their number one priority. We hope they will thoughtfully and objectively consider the unique opportunity before us to substantially increase good paying jobs, meaningfully expand economic activity in the state, cut costs for businesses, and positively impact our citizens and the state we all love. As the head of the state Chamber of Commerce in another conservative state recently put it, “This is not a political issue; it’s an economic issue.” We hope the Montana Legislature will reach the same conclusion.
Bill Johnstone is CEO of Davidson Companies in Great Falls, Dean Folkvord is CEO of Wheat Montana Farms and Bakery in Three Forks, and Ray Kuntz is CEO of Watkins & Shepard Trucking in Helena. The above views are not official positions of their companies, but the viewpoints of the individuals.