Don't mess with Medicaid

Feb 25, 2021

A number of legislative proposals introduced this session aim to improve health care in Montana. These bills are meeting with differing degrees of bipartisan support, but if there’s one key health care program that has proven itself in spades and should not be tampered with, it’s Medicaid expansion. Alas, at least one measure wending its way through the Senate would create onerous new requirements that are certain to reduce the number of people covered by Medicaid, as well as other public welfare safety net programs. That would be a considerable mistake at any time, but is especially unconscionable as Montanans struggle to recover from the crippling effects of a pandemic. Medicaid expansion has faced misinformed opposition before, but managed to win bipartisan legislative approval in 2015. A provision of the Affordable Care Act, the expansion meant the federal government would help provide health care coverage for eligible Montanans. However, state legislators made sure to attach a sunset date that would have allowed the program to expire in 2019. Then, during the 2019 session, legislators agreed to extend Medicaid expansion until 2025, but only after attaching additional restrictions, such as premium payments and work requirements. The Centers for Medicare & Medicaid Services (CMS) has yet to approve those added requirements. In the meantime, ample evidence has accumulated proving the program makes a tremendous difference for low-income families, disabled individuals, general public health and the overall statewide economy. Two recent reports lay out in detail some of the many measurable benefits resulting from Medicaid expansion, which now covers nearly 100,000 Montanans during one of the most challenging eras in health care of our lifetimes.
The Montana Budget and Policy Center notes that the program saw a sizeable jump after the pandemic arrived in Montana in March 2020, when an additional 7,848 people enrolled. As unemployment soared and many workers’ hours were cut, enrollment offered a bit of financial stability for households teetering on tight budgets and ensured health care remained accessible for vulnerable patients with special health considerations. Additionally, roughly half of enrollees live in rural communities, and one in five are American Indian — both populations that have been hit especially hard during the pandemic. Medicaid expansion supports roughly 6,000 new jobs and introduces $650 million into Montana’s economy each year, according to the just-released report "Economic Effects of Medicaid Expansion in Montana," conducted by economist Bryce Ward at ABMJ Consulting Health and commissioned by the Montana Healthcare Foundation and Headwaters Foundation. After weighing the state’s investment against the public gains, the report concludes that “the program’s savings and the revenue generated by economic activity have a net positive effect on the state budget.” In fact, Medicaid expansion actually helped rural hospitals remain open, according to "Medicaid in Montana: How Medicaid Affects Montana's State Budget, Economy, and Health," which was conducted by Manatt Health and commissioned by the Montana Healthcare Foundation. Altogether, Medicaid covers 265,000 children and adults in Montana — cutting the number of individuals who would otherwise be uninsured in half.
Senate Bill 100 is rooted in the false assumption that there is rampant fraud in the state welfare system, and seeks to crack down on this nonexistent abuse by setting up a time- and labor-consuming verification system. Nevertheless, it received a 6-3 vote to pass out of the Public Health, Welfare and Safety last week. SB 100 would put new requirements on those in dire need of the public safety net provided by Medicaid, the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), Children’s Health Insurance and Temporary Assistance for Needy Families. Applicants already are required to provide income information, but this new legislation would require them to provide it every six months, or more often as circumstances change. The fiscal note projects it will indeed save money — by removing people from the rolls. And as shown by the two reports released just this year, those savings will actually result in costs not just for the families who lose coverage but for their communities as well. The original fiscal note estimated that CHIP would cover 2,500 fewer children, Medicaid would cover 503 fewer adults and Medicaid expansion would lose more than 2,615 enrollees.
How much fraud is there in the system? The fiscal note estimates about 50 cases a year. Under the current system, those cases are investigated by the Department of Justice. Under the new system, that would not change. What would change is that thousands of households would be required to prove, then prove again, their eligibility — even as COVID-19 continues to cause major disruptions in their jobs. And the vast majority of adults covered by Medicaid expansion — more than 7 in 10 — are employed. The state would have to review tax and wage information, arrest history, immigration status, housing assistance, utility payments, child care information — and the list goes on. SB 100 bill seeks to create a more burdensome bureaucracy. Put up enough hurdles, and fewer people will manage to jump over them all. If the goal is to keep more struggling Montanans from reaching the finish line and receiving help in their time of need, this bill will definitely accomplish that. Let’s hope that is not what Montana’s legislators are really trying to do.
Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.