Montana Healthcare Employment Up in 2016, Future Uncertain

Jan 25, 2017

Healthcare employment in Montana grew by more than 3 percent last year, after years of growth below 1 percent. That's according to the new annual report from the University of Montana's Bureau of Business and Economic Research.

2016 was the first full year of Medicaid expansion in Montana under the Affordable Care Act, which helped the state's uninsured rate drop by nearly two-thirds.

But the Affordable Care Act also led to steep increases in health insurance premiums for some Montanans. The Bureau says family health insurance plans here used to be about $1,000 dollars cheaper than the rest of the U.S., but now they're roughly the same price.

Economist Bryce Ward wrote the report on Montana's healthcare sector, MTPR's Eric Whitney interviewed him about it in Helena Tuesday:

Eric Whitney: Where does healthcare fall into the mix of important industries in Montana, and what's the growth and the health of that sector of the economy been like?

Bryce Ward: Healthcare's the largest industry in Montana, at least a measured by employment or wages — 15 percent of employment, 17 percent of total wages in Montana are in the healthcare sector — so it's big, and it grows at a rate generally faster than the rest of the economy, so it's a big and important employer. It's easy to miss that ... the reason that we care about healthcare in Montana is that we want to be healthy, and we want access to these services that healthcare provides that help make us healthy, having a good set of providers so that when I need healthcare I can get the healthcare. And that is a challenge in Montana, particularly outside of the major cities and towns where healthcare is sparse.

EW: Is there any reason to think that the trend in the growth of the healthcare sector in terms of employment and wages is going to change as a result of the new administration?

BW: Right now we don't know what they're going to do. If we repeal everything with the Affordable Care Act — so you take Medicaid expansion away. So Medicaid [expansion], the one year it's been here in Montana, I think we've enrolled 67,000 people. That's about $10,000 per person, so there's roughly $670 million — almost all of which is coming from the federal government. If you remove $670 million from Montana's healthcare sector there would probably be some consequences. Same thing with people who were insured through the exchanges. Yes they would still probably get some of that care, and yes, somebody would pay for that care, usually the rest of us in the form of higher premiums or something like that, but there would be some loss. That loss of activity would potentially reduce the capacity within our healthcare sector. So one of the advantages of giving people insurance is that healthcare providers, with certainty, get more money. And people also consume more, and that helps us build a more robust healthcare sector.

The reason I care is that if I get sick, I want to be able to access it. Making the community livable is the fundamental thing that healthcare contributes to the economy. For me, with three small children and an aversion to blood, I don't want to live two hours from a major healthcare center. For me it's a key component of making the place a desirable place to do business.

Bryce Ward, the director of health care research at the University of Montana’s BBER, talks with MTPR News Director Eric Whitney.
Credit Emily Proctor

EW: Has Obamacare been good for the healthcare sector in Montana, and if it goes away, will that be good or bad for the healthcare sector in Montana?

BW: Providing people with a more robust insurance system — with Medicaid expansion, with the insurance exchanges, the fact that the uninsured rate in Montana has plummeted below 10 percent — I think that is an unequivocal good for the healthcare sector. Those people used to be at the margins of getting care. Now they can access a full range of care. Many of them would get care, but it'd be inefficient care. And then two things happened. One is that they end up in a collection or a bankruptcy that's very stressful and harmful to them personally, but the rest of us still paid for it. The money has to come from somewhere at some level. So I think that the insurance expansion — while there's obviously problems and things we want to fix — does help make a more robust healthcare sector in Montana. So if you simply repeal it — which I don't think anybody really will actually do — I think the Congressional Budget Office estimated a simple repeal moves 18 million people off of insurance basically tomorrow, and 32 million people off of health insurance within a decade. That would not be good for the healthcare sector. It probably wouldn't be good for health in Montana. So assuming you want to repeal it, can you build something that replaces it. Which as Republicans have said is somehow better. And to date, we haven't seen anything that looks like a real plan. There's this idea, there's that idea, there's a whole bunch of different things that people pop up. But none of them are a kind of comprehensive thing, and so my general advice is let your senators, let your congressmen know what you're worried about, but save the specific worry until we see something that is rising out of committee and looks like it might actually pass Congress.

EW: In terms of what is the Trump administration going to mean for healthcare in Montana, it sounds like it's just way too early to tell.

BW: It's way too early to tell. You'll hear, 'if you have insurance we're not going to take it away.' So if that's the case, well then now we're dealing with some marginal details, but a lot of the plans that have been talked about do in fact lead to massive potential reductions in the share of people who have insurance. If that happens, then we have much larger consequences that we have to deal with. But right now, you have one hand saying 'we're just going to make it better,' which is great. If you can make it better, make it better. But at the other hand, if you do something that fundamentally changes the nature of insurance coverage or the share of people who have insurance coverage, or otherwise tweak the healthcare sector, then there may be larger effects for Montana.

EW: Just need more specifics?

BW: We need a lot more specifics, yeah.

Bryce Ward is associate director of the Bureau of Business and Economic Research at the University of Montana.

This report was made possible in part by a grant from the Montana Healthcare Foundation.