In his 2,200-word State of the State address Tuesday, Mississippi Gov. Tate Reeves did not make a single mention of Medicaid or Medicaid expansion.
Other than saying that “Mississippians don’t want welfare,” there’s not even a reading between the lines to indicate that the subject is on his mind.
Such negligence has established Reeves as the leading obstacle to doing what 38 other states and the District of Columbia have done — accepting the federal government’s generous offer to cover 90% of the cost of providing health insurance to the working poor.
As a result, the state is losing out on about $1 billion a year in federal money, is missing out on the thousands of jobs Medicaid expansion would create, is putting rural hospitals in danger of financial collapse, and is leaving 170,000 to 300,000 Mississippians without the health insurance they could otherwise have.
Reeves and like-minded Republicans in the Legislature have long argued — even as Medicaid expansion money has been flowing to other states — that Mississippi simply can’t afford to come up with its 10% share of the cost, or roughly $75 million to $100 million a year.
There may, however, not be a cost at all.
The Mississippi Hospital Association, for instance, has offered a plan that would pass on the state’s share to the hospitals and the individual beneficiaries. Why would Mississippi’s hospitals volunteer to pay more in taxes? Because they would get many times more in return by reducing the number of patients they treat who can’t pay for their care.
Even better, the experience in other states that have expanded Medicaid, including Mississippi’s neighbors in Arkansas and Louisiana, suggests there may be no need for the hospitals or the newly insured to pony up. That’s because the economic activity from the extra $1 billion a year from Washington would produce more than enough in new tax revenue to cover Mississippi’s 10% match. In other words, Medicaid expansion — when all the savings and economic spinoffs are factored in — produces a net plus to the state’s balance sheet.
It is glaringly ironic that while Reeves has no interest in a Medicaid expansion that would probably pay for itself, he is keen on a tax cut that almost certainly would not. He used Tuesday’s platform to again push for eliminating the state’s tax on personal income, even before the state knows the full effect of a reduction in that same tax that’s in the midst of being implemented.
The income tax covers about a third of the state’s $6 billion general fund budget. There is no way the state can eliminate that much revenue without raising taxes elsewhere — such as hiking Mississippi’s already high sales tax or establishing a state tax on property — or cutting allocations for schools, public safety and the other necessary services that the income tax funds.
Reeves pretends that eliminating the income tax would generate such an explosion in economic growth that it would offset the $2 billion a year in lost revenue to the state with other taxable sources. No serious economist believes that. Unlike Medicaid expansion, which would bring in loads of new money and thus truly stimulate the economy, ending the income tax would mostly shift already existing money from one pocket to another. Whatever jobs were created in the private sector as a result of eliminating the income tax would be offset by jobs lost in the public one.
For the moment, the ramifications of Mississippi’s failure to expand Medicaid are being softened by the pandemic stimulus packages. But that money is going to dry up, probably within the next year. When it does, the cost of Reeves’ stubbornness will be plain and potentially irreversible.
