The Montana Legislature has the opportunity to do more good for our state at less cost than will be available for decades. All we need to do is accept funds to which our citizens are entitled through Medicaid expansion to establish a Montana-based privately run health insurance program. As a 30-year investment professional, I find the business and financial benefits of expansion to be remarkable.
Much attention has been focused on the 70,000 Montanans who would be provided healthcare coverage. Largely overlooked in the discussion is the fact that all Montanans will benefit through a stronger economy, substantial job creation, a more secure healthcare system, and a reduction in the costs we all pay to care for the uninsured. Let me explain.
1. Expanded economy. Accepting available federal funding will bring $5.4 billion into Montana over the next six years. These are new dollars flowing into the state, which is especially meaningful from an economic standpoint. Normally policymakers deal with the challenges of allocating taxing and spending dollars within Montana. The opportunity to bring nearly $1 billion per year of additional revenue into our state is unique and compelling. It should be viewed more favorably by lawmakers than any proposal to move around resources within our borders.
2. Job creation. The enormous inflow of revenue into our economy will create 12,000 high-paying jobs in the healthcare sector and among small businesses that will benefit from the additional economic activity. Through 2021, more than $3 billion in additional salaries and wages will be paid to Montana workers. Simply put, there is no more important or impactful economic development and job creation initiative that will be considered by our Legislature.
3. Reduced healthcare costs. Montanans are currently paying higher healthcare and insurance rates to cover the costs incurred to care for the uninsured. In 2014, Montana hospitals experienced $400 million in uncompensated care charges. States that have opted into Medicaid expansion have seen a 30 percent reduction in uncompensated care, benefiting all of their citizens.
4. A great deal. The net investment required of the State to substantially benefit our economy and citizens is negligible. The federal government covers 100 percent of the cost initially, eventually moving to 90 percent. But even when we reach a 10 percent match, the State’s costs need to be considered on a net basis — after increased tax receipts from the expanded economy, reduced healthcare costs, and savings to State departments. Any thoughtful analysis will support what most other states have concluded —the benefits far outweigh the costs.
5. It’s our money. To those who say we shouldn’t accept “federal money,” I would note that those federal funds are derived from taxpayers in every state, including ours. Montana citizens, businesses and hospitals are already paying their fair share of taxes and the costs of the Affordable Care Act. Why in the world would our Legislature deny us access to the benefits we’re paying for?
There is a reason why 28 states — red and blue — have already opted in to some form of Medicaid expansion and uniformly say it was the right call. There is a reason Medicaid expansion is supported by most Montanans, the state Chamber of Commerce, business leaders, veterans, churches and hospitals. It is clearly the right thing to do — for all Montanans. Let’s not allow politics to trump sound policy. Let’s accept federal funds for a healthier and stronger Montana.
-- Mark Semmens is managing director of Investment Banking for D.A. Davidson & Co. Since joining the firm in 1985 he has provided financial and strategic advisory services to corporate clients in connection with capital raises, mergers, acquisitions, and other business transactions. He served on the Montana Board of Regents from 2000 to 2007 following appointment by Gov. Marc Racicot and served as chairman of the Board of Trustees of Carroll College from 2010 to 2013. He and his wife Rosemary live in Great Falls, where they raised their four children.