Scott Reed: An investor's view of Medicaid expansion

Dennis Seid, Northeast Mississippi Daily Journal, Tupelo
·3 min read

Apr. 18—I am an investment professional and this is an investment column. I have always tried to look at the investment world through an objective lens. I certainly have my personal opinions on how our government works, but when giving investment advice, it doesn't really matter how I want things to be. It only matters how things are.

You can argue all day long about the benefits or lack thereof of the Federal government offering subsidies for the expansion of Medicaid. I would probably agree with some of your points and disagree with others. But the fact is that the offer is there. It doesn't really matter if the offer came from a Democratic or a Republican administration. It only matters that there is an offer.

Opponents of the expansion have said that the State of Mississippi just can't afford to pay for the expansion. That statement is extraordinary. I understand that a $100 million investment in anything is a lot of money. However, a $100 million investment in this project will trigger an $890 millioninvestment from the Federal government. That is an 890% investment return in one year. I don't know about you, but I have been in the investment world for 36 years and I just can't find an 890% investment return.

As a matter of fact, the average annual return for the stock market over the past 100 years has been around 10% which is significantly lower than 890%. And that doesn't even consider the economic impact of that kind of investment in our state. I have seen projections that indicate a $100 million investment from the state could have as much as $200-300 million in economic impact to our state per year. Money that we could use in a lot of ways. For instance, just last week Mississippi received a D+ from the American Society of Civil Engineers for the condition of our infrastructure. We could probably spend some money there.

I haven't even touched on the fact that the hospitals in the state are taking the brunt of the impact from this policy. The hospitals are still taking care of those that need medical care, they just aren't getting paid for it. In Y'all Politics last week one hospital administrator reported that "...the uncompensated care at his hospital has gone up 44% during the pandemic." The Mississippi Hospital Association has said that over half of the rural hospitals in Mississippi are in a financial crisis. If we don't do something to help cure the financial strain on our hospital system in Mississippi it won't really matter if you have insurance because you may not have anywhere to go for medical care. Especially critical care.

The last point I will note is that people want to tell you that this is not a partisan issue; however, it is impossible to ignore the fact that only 12 states have refused to expand Medicaid. All 12 are Republican states. And I get it. This all started under a Democratic administration. Mississippi has become a significantly Republican state. If you don't tow the line, you won't get re-elected. But I have never voted for someone and said, "I hope they go down to Jackson and do whatever it takes to get re-elected." I say, "I hope they go down to Jackson and do the best they can for Mississippi." And you are going to have a hard time telling me that it is a bad idea to invest $100 million for a guaranteed return of 890%.