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2023 Medicaid Expansion Economic Effects Press Release

2023 Medicaid Expansion Economic Effects Press Release

An updated study of Montana’s Medicaid expansion program finds it continues to support economic activity and improve health while imposing no fiscal cost to the state.

Bozeman and Missoula, Mont. (February 7, 2023) – Headwaters Foundation and the Montana Healthcare Foundation released a report on Montana’s Medicaid expansion program and its impact on the state’s economy. New findings show that Medicaid expansion continues to reduce un-insurance, improve health care access and use, and stimulate the economy by bringing federal dollars into the state and allowing households to spend less on health care and more on other goods and services. While Montana pays for 10% of Medicaid expansion’s cost, state budget savings and increased economic activity created through the expansion more than offset the state’s share of cost.

This study adds to a robust set of findings that demonstrate the positive impact of Medicaid expansion on Montana’s workforce while maintaining a neutral, even positive, impact on the state budget. Montana’s approach to Medicaid expansion is working and remains a crucial support to people working in health care, childcare, and other direct service industries that keep Montana’s economy humming.

Brenda Solorzano,
Headwaters Foundation CEO

Medicaid expansion continues to benefit the state by providing health insurance to over 100,000 Montanans while supporting a strong economy. Although Montana pays roughly 10% of the costs, the report shows that Medicaid expansion continues to have a net fiscal benefit to the state budget.

Dr. Aaron Wernham,
Montana Healthcare Foundation CEO

Key findings include:

  • Medicaid expansion generates substantial health and economic benefits at no cost – and likely a fiscal benefit – to the state. At current spending levels, Montana’s 10% share of costs would amount to roughly $100 million per year. This cost is more than offset by:
    • Reduced spending on other Medicaid programs and state-funded health services for the uninsured. Budget savings attributable to expansion offset an estimated 60%-80% of the state’s share of the expansion’s cost.
    • A special revenue account for funds that come to the state in relation to the Medicaid expansion: these revenues offset a portion of the state’s share of expansion costs.
    • Roughly $51 million in revenue related to the estimated $475 million in personal income generated by Medicaid expansion.
  • Medicaid expansion reduces un-insurance, improving access to health care and reducing medical debt and bankruptcy:
    • Statewide, the rate of un-insurance fell by 45% since Medicaid expansion was implemented. New county analysis shows that the decline in un-insurance ranges by county from effectively no change to over 70%.
    • Health insurance facilitates access to essential health services – like primary care and behavioral health care – while avoiding medical debt and bankruptcy.
  • Montanans enrolled in Medicaid expansion work or have an impediment to working, such as disability or caretaking responsibilities:
    • 96% of Montana’s adult Medicaid population work or report a reasonable impediment to work, like attending school, disability, or caretaking responsibilities.
    • Most Medicaid expansion enrollees work in low-wage occupations essential to the economy, like personal care, childcare, construction, retail, and food service.

Medicaid provides health coverage for nearly 300,000 low-income Montanans, enabling access to physical and behavioral health care. In 2015, the HELP Act expanded Medicaid to cover nondisabled adults without children with incomes up to 133% of the federal poverty level. In 2022, approximately 115,000 Montanans were covered by Medicaid expansion.

Economic Effects of Medicaid Expansion in Montana was produced by Bryce Ward of ABMJ Consulting and commissioned by the Montana Healthcare Foundation and Headwaters Foundation.