The legislature is currently considering SB 100. This legislation purports to “prevent fraud” but is riddled with unintended consequences impacting adults and children accessing Medicaid health care coverage and food assistance.
SB 100 is a Trojan Horse - it lures legislators in with the promise of saving the state money by rooting out fraud. The fiscal note, however, reveals a different story. The bulk of the purported savings to the state come from more than a thousand Montanans who are currently eligible for coverage losing their health insurance.
The fiscal note for SB 100 assumes that adults enrolled in Medicaid expansion and children on the Children’s Health Insurance Program (CHIP) would no longer have a one-year eligibility period for their insurance. SB 100 would end the current practice, known as continuous eligibility, which allows Montanans living on low incomes to maintain their health insurance even if their income fluctuates during the year.
An expensive and complicated verification process would require those enrolled to verify eligibility at least every six months. This process would create a potential barrier to maintaining coverage often when they most need it. Because families accessing coverage and living on low wages often face fluctuations in wages over short periods, the Department estimates that thousands of enrollees would lose their insurance under this cumbersome verification process. (The exact number of those losing coverage is unclear. The Department estimates the total number of “member months,” which equates to roughly 1,500 adults and 270 children over one year. Still, the reality is that it likely represents far more individual enrollees losing coverage for a portion of the year.)
Efforts that would cut off coverage for those currently eligible will create uncertainty for both workers and businesses. The reality is that a fair number of those who lose coverage are back on the program within a matter of months. This dynamic, referred to as “churn,” often costs the state more in administrative costs. Those facing critical health issues face the risk of losing coverage and services when they most need them. In a study related to the impacts of churn in selected states, 16.2 percent of those churning on and off of coverage had to switch or change their prescription medication due to changes in coverage, 33.9 percent either skipped medication doses or stopped taking medication altogether.
The reality is that people accessing coverage through the HELP program are often doing so temporarily. Still, coverage during that time is often critical to accessing preventative services, mental health, and SUD services, helping those enrolled reach financial and economic stability. According to the data, individuals accessing HELP coverage are enrolled for an average of two years, with roughly a third receiving coverage for less than 12 months. In 2019, over 60,000 HELP enrollees accessed preventative care services and more than 30,000 behavioral health services.
The loss of health care coverage by people who are currently eligible results is supposed savings to the state. But it also results in millions of dollars of lost federal revenue - funds that allow people to access health care and help support local businesses, tribal communities, and rural hospitals.
Fraud is exceedingly rare, and the Montana Department of Justice estimates 50 cases of suspected fraud tied to implementing SB 100. To put these 50 cases in perspective, this represents 0.02% of the total caseload within those programs impacted. The cost savings the bill claims do not come from finding fraud but instead come from eligible individuals losing access to these vital programs and services.
Bills such as SB 100 can be costly. The state will need to build an enhanced verification system and hire employees to re-enroll people who lost their benefits despite still being eligible. The fiscal note which touts the money saved by ending continuous eligibility hides what is likely an expensive endeavor to find a minimal amount of fraud.
But the actual cost of the bill is not reflected in the fiscal note. It comes when Montanans who are struggling to make ends meet must jump through hoops to feed their families and access affordable medical care for themselves and their children.
As we strive to recover from this pandemic, we must ensure Montanans have access to health care to keep our communities safe and healthy. SB 100 will jeopardize needed services for children, individuals, and families at a time when they are most in need of help.
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.