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Data Shows Medicaid Expansion is Good for Business

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In 2015, I led the effort to pass Medicaid expansion in Montana because our state needed a new path forward. As a business owner, I know how expensive healthcare is for businesses and how important it is to have healthy employees. At the time, I also served on the board of my local hospital and knew the challenges of providing healthcare to people without insurance. Montana’s hospitals were awash in uncompensated costs.

The results of Medicaid expansion have exceeded my expectations. I hear stories about how it helps people. To me, data is king, and study after study shows an incredible return on investment. Ultimately, Medicaid expansion became the largest, most focused, and most successful economic development plan in Montana’s history. Wyoming has the opportunity to see the results Montana has seen.

Let’s dig into the numbers.

Since its passage, Montana has seen an increase in workforce participation between 6 and 9% within the expansion population. Healthy people show up to work consistently, get and keep better-paying jobs, and are less reliant on government programs. Montana’s expansion enrollees only stay in the program for an average of 2.1 years because the health benefits and the cost savings improve their financial position enough to afford other insurance relatively quickly.

Medicaid expansion boosts small businesses and is our state’s single most significant business incentive. In Montana, 60% of businesses have at least one employee on Medicaid expansion. Private insurance would have cost these employers more than $1 billion. Medicaid expansion created more than 6,000 new jobs generating $400 million in new personal income, making Montana a better place to live, work, and do business. 

Medicaid expansion saved rural healthcare. Individuals living in rural areas have higher chronic and behavioral health conditions and mortality rates, making health coverage critical. The rural uninsured rate in non-expansion states is nearly twice as high as in expansion states. In Montana, 64% of Medicaid expansion enrollees are rural. This discrepancy brings new, outsized resources to rural providers. Funding for substance use treatment has quadrupled from 2016 to 2020, incentivizing more providers to offer SUD treatment services to rural places. 

Like Montana, Wyoming hospitals are among the largest employers, and keeping them financially healthy is crucial. Marketplace premiums are 11% higher in states that did not expand Medicaid, and health insurance in Wyoming is the most expensive in the nation. Montana health insurance is affordable, which leaves more money in people’s pockets. 

With insurance, people seek preventative care and catch things while they are easier to treat. This reduces expensive ER visits and allows people to keep working rather than developing a serious problem causing a gap in work or even bankruptcy. Of Montana enrollees covered for at least two full years between 2016 and June 2021, 35% had at least one ER visit during their first year. By their second year, the number of ER visits declined by 14%. This reduction saves everybody money. 

Montana spends about $80 million to meet the federal match requirement for Medicaid expansion. However, we are more than making up for it in budget savings and new revenue. If someone tells you that Medicaid expansion is financially unaffordable, they are not looking at the whole profit and loss statement. Let me explain why they are wrong.

Medicaid expansion generated direct state budget savings of over $27 million in 2021. This is because individuals who would be covered by traditional Medicaid, which has a lower federal financial match, are now covered in the expansion group at a higher match rate. State spending for substance use and mental health treatment programs was offset by $2.3 million, and inmate hospitalization costs were reduced by $11.5 million. Expansion also generates $700 million in recurring economic activity, bringing in more than $40 million annually in state revenue. 

What felt like a potential risk in 2015 wasn’t a risk at all. Rather than the sky falling — the sun rose. Montana is financially sound, and the program is sustainable. Medicaid expansion didn’t harm education or other program funding. We helped a large portion of our population and saved rural healthcare. 

When Wyoming expands Medicaid, you too will see all the benefits we’ve seen. 

Rep. Ed Buttrey is a Republican member of the Montana Legislature serving his seventh term. In 2015, Ed was instrumental in negotiating a successful Medicaid expansion plan for the state of Montana and is currently an integral member of the Montana Business Solutions Caucus.


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