Missing out or not?
In Mississippi, John, a devoted husband and father of two, works tirelessly to support his family. Despite his hard work, his income hovers at just 120% of the national poverty level, making health insurance a financial burden beyond his reach. Having not expanded Medicaid, Mississippi leaves individuals like John in a healthcare coverage gap.
One day, while tending to his yard, John suffered a deep cut on his leg. Concerned yet financially constrained, he and his wife reluctantly decided against seeking medical attention due to the cost, hoping the wound would heal on its own. However, several days later, the cut was severely infected, forcing John’s worried wife to insist on an emergency room visit.
After many hours of waiting in the ER, nurses cleaned, drained, and dressed John’s wounds, but the delay in treatment led to a lengthy recovery. He was bedridden for ten days, requiring two follow-up visits and an intense course of antibiotics. The financial impact was twofold: the hospital absorbed the costs as uncompensated care, and John lost ten days of pay, jeopardizing his job.
In Arkansas, James, also a husband and father of two, lives a different reality thanks to Medicaid expansion. Earning a similar income to John, James has access to affordable health insurance under the expanded program, covering individuals up to 138% of the poverty level.
James promptly visited a clinic after sustaining a similar leg injury during yard work. The wound was efficiently treated and stitched, and he was prescribed a 5-day course of antibiotics. The affordable co-pay, made possible by Medicaid expansion, meant that James didn’t hesitate to seek the care he needed.
James’s swift medical response prevented complications. He missed no work, the healthcare providers got paid, and his wound healed without any side effects, demonstrating the profound impact of accessible healthcare.
The stories of John and James paint a stark picture of the significant differences in healthcare experiences across state lines. John’s ordeal in Mississippi highlights families’ struggles and risks without access to affordable healthcare. In contrast, James’s smooth recovery in Arkansas showcases the positive outcomes of Medicaid expansion, where accessible healthcare benefits individuals and families and reduces the financial strain on healthcare systems. This cross-state comparison underscores the potential benefits that Mississippi could realize by adopting a similar Medicaid expansion as in Arkansas.
The Affordable Care Act extended Medicaid eligibility in participating states to adults ages 19 to 64, including adults without children, with family/household incomes below 138% of the federal poverty level. Eligible adults include citizens and legal immigrants who have resided in the U.S. for at least five years. As part of the expansion, the federal government paid 100 percent of the Medicaid costs of the expansion group in participating states each year from 2014 to 2016. This percentage gradually decreased to 90 percent for 2020 and each year after that.
Thus, states that entered expansion before 2020 received the most generous funding from the federal government. However, the American Rescue Plan, which became law in March 2021, provides an incentive for states that have not elected to expand Medicaid and missed out on these early increased payouts if they decide to expand. Several states took advantage of this two-year 5-percentage point increase in the federal medical assistance percentage (FMAP) for most of their existing Medicaid groups. Mississippi did not.
The 2021 study by J. Corey Simmons and Sondra Collins from the University Research Center of the Mississippi Institutions of Higher Learning[1] offers a compelling insight into the economic and healthcare benefits of adopting the Affordable Care Act’s Medicaid expansion in Mississippi. This analysis delves into various aspects, from increased Medicaid enrollment to the consequent economic stimulation.
A key finding is that Medicaid expansion in Mississippi would significantly increase Medicaid enrollment by approximately 228,000 to 233,000 individuals. These are primarily adults aged 19 to 64, living in households with incomes below 138% of the federal poverty level. This expansion is crucial in extending healthcare access to a considerable segment of the currently under-served population.
While the annual costs to the state for this expansion are estimated to be between $186 million and $207 million from 2022 to 2027, these figures do not exist in a vacuum. Notably, estimates show the state would save approximately $206 million to $227 million annually over the same period. These savings, stemming mainly from a reduction in uncompensated care costs, which currently stand at about $600 million annually, effectively neutralize the financial burden of the expansion.
The potential impact on Mississippi’s economy is particularly noteworthy. The expansion is estimated to increase the state’s real GDP yearly by about $719 million to $783 million from 2022 to 2027. This significant boost is a direct result of increased healthcare spending and its multiplier effect on the economy.
Employment is another area set to benefit, with an expected addition of about 11,300 jobs per year from 2022 to 2027. These jobs, created indirectly because of the Medicaid expansion, contribute to the state’s overall economic growth and stability.
The fiscal benefits extend to state revenues as well. The study estimates an annual revenue increase of around $44 million each year, primarily from the rise in individual income tax revenues. Additionally, experts project the expansion would elevate personal income in Mississippi by approximately $539 million to $812 million annually from 2022 to 2027.
An intriguing aspect of the Medicaid expansion is its potential to attract new residents to the state. Estimates suggest an increase in the state’s population by about 3,300 to 11,500 new residents per year between 2022 and 2027, further contributing to the state’s economic and demographic dynamics.
“Mississippi will be able to save funds from a variety of sources if the state enters Medicaid expansion, according to our estimates. We estimate these total annual savings range from approximately $206 million to $227 million between 2022 and 2027–roughly offsetting the annual costs to the state from Medicaid expansion over the same period.[2]”
In the first two years, expanding Medicaid would provide over $1.6 billion annually in federal funds to hospitals and other healthcare providers and over $1.35 billion a year after that.[3] Adopting the Affordable Care Act’s Medicaid expansion in Mississippi presents a unique opportunity to improve healthcare access for a significant portion of the state’s population while stimulating economic growth, creating jobs, and increasing state revenues. The findings of Simmons and Collins underscore the multifaceted benefits of this policy change, making a compelling case for its adoption.
It’s hard to understand why politicians would turn their backs on an opportunity to improve healthcare access and grow a state’s GDP at little or no cost. The situation has become urgent with the deteriorating financial condition of hospitals in Mississippi, driven by the increase in unreimbursed medical expenses.
“In Mississippi, one of the nation’s poorest states, the missing federal health care dollars have helped drive what is now a full-blown hospital crisis. Statewide, experts say that no more than a few of Mississippi’s 100-plus hospitals are operating at a profit. Free care is costing them about $600 million a year, the equivalent of 8 percent to 10 percent of their operating costs — a higher share than almost anywhere else in the nation, according to the state hospital association.[4]“
The situation is so dire that Mississippi’s Governor Tate Reeves announced a plan while successfully running for an additional term in 2023 where to access additional Medicaid funds, hospitals would pay an additional $178 million per year as the state’s portion to gain an estimated $680 million in federal funding. This plan is essentially an extra tax on hospitals to get additional federal funding.[5] A tax ultimately paid by the hospitals’ patients directly or through their insurance companies.
Increasing spending by $1 to get $3.80 in funding from the federal government is a good deal. So why are some Mississippi political leaders continuing to reject spending $1 to get $9 in federal spending through ACA Medicaid Expansion? Why do they reject this plan when the state would get $9.50 per $1 for the first two years, and economists have shown that the state receives every single dollar back in savings on uncompensated healthcare costs? All this while insuring over 225,000 more state citizens, increasing state health care workers, growing state GDP, and gaining more state residents?
Here are some of the arguments that Mississippi politicians opposed to Medicaid expansion have used:
- The state cannot afford to expand Medicaid, which will burden the state budget.
- The federal government will not keep its promise to pay 90% of the expansion cost, leaving the state with a huge bill.
- Medicaid expansion will create a dependency culture and discourage people from working and getting private insurance.
- Expanded Medicaid will not improve health outcomes or access to care, but will strain the existing healthcare system and providers.
Various studies, experts, and advocates who support Medicaid expansion have challenged these arguments. They claim that:
- Medicaid expansion will generate economic benefits for the state, such as increased jobs, tax revenues, and GDP growth.
- Medicaid expansion will reduce the number of uninsured people and improve their health and well-being.
- Medicaid expansion will help the state’s struggling hospitals and rural healthcare providers by reducing uncompensated care and increasing revenues.
- Medicaid expansion will leverage the federal funds that Mississippians already pay through taxes and bring them back to the state.
Yet Reeves has and continues to oppose expanding Medicaid. In 2021, Reeves clearly stated, “I am opposed to Obamacare expansion in Mississippi. I am opposed to Obamacare expansion in Mississippi. I am opposed to Obamacare expansion in Mississippi. I don’t know how many ways I can explain this to y’all.[6]”
To this day, he describes this program to the people of Mississippi as one which will:
- Remove people from the workforce
- Trap people in another federal government program
- Add 300,00 Mississippians to the welfare roles
Medicaid expansion is not a handout and does not remove people from the workforce or educational institutions. It is a state and federally funded program that provides healthcare insurance to those unable to afford it. The Kaiser Family Foundation found that over 90% of Medicaid recipients either work, are in school, are disabled, or provide care to family members. Gaining healthcare insurance does not allow people earning at or just above the national poverty level to “retire.”
Mississippi’s Republican House Speaker Philip Gunn, whose website states, “We must work with providers to reduce the costs of healthcare. We must also require the recipients of healthcare services to assume personal responsibility for their health and take care of themselves,” has been publicly opposed to Medicaid Expansion.
In 2021, Gunn said, “I don’t see Medicaid expansion as something that is beneficial to the state of Mississippi. I just don’t think the taxpayers can afford it. That is what it boils down to is the taxpayers. It is their money. I just don’t have the taxpayers calling saying we want you to raise taxes so we can expand Medicaid.[7]”
Yet, none of the states expanding Medicaid coverage have increased taxes, and several have seen a net reduction in spending after expanding the number of insured citizens through the program.
“Studies in Arkansas, Kentucky, Louisiana, Michigan, Montana and Virginia showed the states saw a net reduction of more than 4% in spending on their traditional Medicaid programs after expansion. Louisiana’s Medicaid expansion in 2016 brought a 33% reduction in uncompensated care costs for hospitals, including a 55% reduction for rural hospitals.[8]”
The results from other states are clear and overwhelming. The estimated economic benefits are thoroughly gathered, thoughtfully calculated, and fairly represented. They present a compelling argument that expanding Medicaid in Mississippi would improve the lives of hundreds of thousands of Mississippians while improving the overall healthcare system across the state.
You can decide why some of Mississippi’s politicians, all Republicans, prevent the state from accessing well over a billion dollars of federal funding each year. No other state has increased taxes on its people. There is no reason other than mismanagement that suggests it will raise taxes on Mississippi’s citizens.
It will lower hospitals’ uncompensated medical care costs, helping to fix the urgent hospital crisis in the state. This situation would have been lessened and perhaps even avoided had Mississippi joined the other 40 states in accessing these federal Medicaid funds a year ago.
People do not leave the workforce or stop seeking work when they get health insurance. In fact, it helps them stay healthy and able to get and keep a job.
Expanding Medicaid will also bring more people to Mississippi, more healthcare workers to improve the care and quality of life across the state, and more people to do the jobs Governor Reeves seems so eager to fill.
All of these additional people will increase the state’s GDP. Expanding Medicaid is good for Mississippi, and it is good for the people of Mississippi. Mississippi’s politicians should expand it now.
BIBLIOGRAPHY
Gunn, P. (2024) ‘Solutions | Gunn’. Available at: https://philipgunn.org/solutions/ (Accessed: 7 January 2024).
Harrison, B. (2023) Reeves makes clear that cost is not his reason for opposing Medicaid expansion for working poor, Mississippi Today. Available at: http://mississippitoday.org/2023/10/01/tate-reeves-medicaid-expansion-costs/ (Accessed: 5 January 2024).
Harrison, B. (2021) Mississippi politicians don’t believe what they keep being told about Medicaid expansion, Mississippi Today. Available at: http://mississippitoday.org/2021/09/19/mississippi-politicians-medicaid-expansion-opposition/ (Accessed: 7 January 2024).
LaFraniere, S. (2023) ‘“We’re Going Away”: A State’s Choice to Forgo Medicaid Funds Is Killing Hospitals’, The New York Times, 28 March. Available at: https://www.nytimes.com/2023/03/28/us/politics/mississippi-medicaid-hospitals.html (Accessed: 5 January 2024).
Miller, J.C. and Collins, S. (2021) ‘A FISCAL AND ECONOMIC ANALYSIS OF MEDICAID EXPANSION IN MISSISSIPPI UNDER THE AFFORDABLE CARE ACT’.
Pender, G. (2022) Who’s opposed to Mississippi Medicaid expansion and why?, Mississippi Today. Available at: http://mississippitoday.org/2022/11/15/medicaid-expansion-opposition-why/ (Accessed: 5 January 2024).
[1] (Miller and Collins, 2021)
[2] (Miller and Collins, 2021)
[3] (Harrison, 2023)
[4] (LaFraniere, 2023)
[5] (Harrison, 2023)
[6] (Pender, 2022)
[7] (Pender, 2022)
[8] (Pender, 2022)
