Montana's legislators must reauthorize Medicaid expansion

Nov 18, 2018

Missoulian Editorial
Montana legislators met in Helena this past week to attend orientation for the 2019 session that will begin in just a few short weeks, and to determine leadership for the House and Senate. At the same time, Gov. Steve Bullock released his budget proposal for the 2021 biennium, a plan that calls for maintaining the Montana Health and Economic Livelihood Partnerships (HELP) Act that expands Medicaid in Montana.
Thus the stage is set for the start of the 66th legislative session on Jan. 7, 2019. One of the biggest challenges facing lawmakers in the new year will be ensuring that Montana’s most vulnerable are able to receive the care they need to lead long, healthy lives. This means renewing the enormously successful Medicaid expansion program.
Unfortunately, some state legislators already have hinted at their intention to severely reform Medicaid expansion, or see it end altogether. This would be a tragic mistake.
Medicaid expansion has helped tens of thousands of low-income Montanans since it took effect in January 2016, thanks to a bill narrowly passed by the 2015 Legislature. At last count, more than 96,000 Montanans were enrolled, helping to slash the state’s uninsured rate by nearly half.
Who are these folks? Medicaid applicants must make less than 138 percent of the federal poverty level: $16,643 for a single person or $33,948 for a family of four. Montana's program requires enrollees to pay 2 percent of this meager income in premiums.
More than 70 percent are families with children. According to the Henry J. Kaiser Foundation, 61 percent of children with special health care needs are covered by Medicaid in Montana, and 67 percent of adult enrollees are working in Montana. Medicaid covers 3 of every 5 nursing home residents, and 1 of every 2 individuals with a disability.
But some Republican legislators suspect there must be freeloaders in the group and want to push workforce requirements as a condition of enrollment. Already, there are bill draft requests in line to generally revise Medicaid expansion.
Montana’s Medicaid program already includes assistance for those interested in job training and career counseling, and Gov. Bullock’s budget proposal summary notes that Montana is the only state in the nation to have boosted, by 9 percent, labor market participation among non-disabled enrollees.
However, there remain other barriers to employment, including lack of transportation or child care. Not surprisingly, the enrollment rate tends to be higher in counties with higher unemployment rates and higher numbers of people living in poverty. For these folks, Medicaid enrollment ensures they are able to continue to receive health services until they are able to overcome those barriers and land a good-paying job.
Multiple studies show that Medicaid expansion has had a strong positive effect on more than just individual health outcomes. According to an April 2018 report by the Bureau of Business and Economic Research at the University of Montana, Medicaid expansion can be directly linked to substantial gains in jobs and personal income through increased economic activity; it even reduces debt and crime rates.
Medicaid expansion spurs the economy, actually resulting in a net savings for Montana taxpayers. Under Medicaid expansion, the federal government pays a greater portion of the costs for a number of folks who were previously covered primarily by state dollars, resulting in a general fund savings of $58 million so far, according to an October report by the Montana Budget and Policy Center.
As the report notes, “during its first two years, Medicaid expansion spending totaled $802 million” – with the state responsible for picking up only 5 percent of the total costs, and the federal government covering the rest. By 2020, if Medicaid expansion remains in place, the state’s share will increase to 10 percent, or about $60 million a year.
Initiative 185 would have raised up to $26 million per fiscal year to help pay for Medicaid expansion through a $2 per pack increase on cigarettes. It also would have helped reduce health care costs by reducing the number of tobacco users in Montana. Unfortunately, I-185 failed to gain enough votes to become law after major tobacco corporations spent a huge amount of money – more than $17 million – to defeat the proposal, which was backed by a number of Montana health organizations.
A number of state legislators opposed the measure as well, some signaling their intention to restrict the requirements for Medicaid expansion in order to reduce the number of people who qualify. But I-185 would not have prevented lawmakers from making reforms to the program; it simply would have provided that the program be maintained instead of sunsetting in June 2019, which is what will happen if legislators cannot agree on a plan to keep it going.
Any reforms should be viewed with an extremely critical eye, because Montana’s Medicaid expansion is working extremely well, just as it is. It’s true that the number of people enrolled is higher than originally expected, but Montanans should take this as good assurance that people who have long needed health care are finally able to get it.
Bullock’s proposed budget summary notes that Montana’s uninsured rate is now at 7 percent; it was 20 percent as recently as 2013. Rural communities have seen the costs associated with uncompensated care reduced by nearly 50 percent, and Medicaid expansion has kept hospitals open in states that adopted it.
The budget proposal provides a good starting framework for discussion. It’s up to the 2019 Legislature to reauthorize Medicaid expansion so it can continue improving Montana’s health.
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.