One meeting, two wildly different visions of Medicaid expansion
Two presentations to lawmakers on Wednesday painted very different pictures about the impact of Medicaid expansion in Montana and the stakes should it be allowed to expire next year.
One suggested that expansion drains state resources without materially improving health outcomes for broad swaths of the population. The other asserted it offsets costs to the health care system as a whole, improves access to care in rural areas and reduces the number of people without insurance.
How lawmakers understand the joint federal-state health insurance program and its impacts on the state's economy as well as the health of Montanans could shape the contours of future debate over Medicaid, one that's teed up for the next legislative session in 2025.
Montana first expanded Medicaid under the Affordable Care Act in 2015, allowing able-bodied adults earning less than 138% of the federal poverty line to enroll. It renewed the program once again in 2019. Total Medicaid enrollment is almost 228,000 people, including roughly 81,000 covered under expansion as of June. Medicaid expansion will expire in June 2025 if not renewed by the Legislature.
Members of the human services interim budget committee first heard from the Foundation for Government Accountability , a conservative public policy think tank on the record advocating against expansion , and Paragon Health Institute , started by a former advisor in the Trump administration to promote free market health care policy solutions.
Brian Blase, Paragon's founder, characterized Medicaid as "no longer a program for the poor," saying that people who are able to be covered are not always below the federal poverty line. By definition, Medicaid expansion allows people who earn below 138% of that federal poverty market to be covered.
In 2024, the federal poverty line for a single individual is a gross annual income of $15,060. For a family of three, it is $25,820. Expansion allows coverage at an income of $20,783 and $35,632, respectively.
Presenters also asserted that Medicaid expansion's impact on overall health was misleading.
"What Medicaid expansion mostly represented was a resource allocation, some people got more medical care, some people got less medical care," Blase said.
Lawmakers then heard from the authors of a report commissioned by the Montana Healthcare Foundation , a private foundation focused on health policy, and conducted by research firm Manatt Health. The Montana Healthcare Foundation was created more than a decade ago after the sale of Blue Cross and Blue Shield of Montana and is tasked with managing its assets for public benefit while maintaining "editorial autonomy."
That report cited a 30% decrease in the uninsured rate since expansion began and a nearly 11% reduction in costly emergency department services.
"We do have more credible evidence now," said Patti Boozang, senior managing director with Manatt. "And the preponderance of that evidence is quite positive with respect to expansion."
State budget impacts
Medical services provided to people enrolled in Medicaid based on income are reimbursed at a rate of 90% by the federal government, leaving the state to pay for just a small share of the cost.
That's a higher reimbursement rate than for care provided to individuals eligible for Medicaid traditional program parameters such as children, pregnant women and adults with physical disabilities.
Central to supporters' case for Medicaid expansion is the argument that it reduces costs on the entire health system and, therefore, means fewer taxpayer dollars go toward medical bills.
According to the Montana Healthcare Foundation, while gross spending on Medicaid has increased since expansion was approved nearly a decade ago, the share of the state's general fund spent on financing the program has remained the same at about 13% every year.
Opponents say expansion is costlier than anticipated when first proposed to Montana's Legislature.
Citing CMS data, Hayden Dublois from the Foundation for Government Accountability said that total Medicaid spending had overrun projections by 107% in the first four years of expansion. On state spending, Dublois said actual expenditures had exceeded projections by 141%.
This trend holds steady across most of the 40 states that have adopted expansion, according to Blase from Paragon, who said that spending in 2020 across all those states was 32% higher than the think tank the Urban Institute projected it would be for 2022.
More people are insured under the program than originally expected.
According to the fiscal note attached to the original 2015 legislation authorizing expansion, an estimated 45,723 adults would be participating by 2019. As of 2016, it had extended to 54,000 Montanans.
About 81,000 Montanans currently have health insurance because of Medicaid expansion, down from the pandemic peak. During that time, people were automatically re-enrolled rather than having to reapply annually.
Supporters say these numbers are a good thing because health care coverage leads to improved access to care, and it's provided at a good financial deal to the state. Opponents like Dublois' organization say the data signals over-reliance on a government program that crowds out private options.
Work requirements
Perhaps the starkest contrast between the two presentations given to lawmakers on Wednesday surrounds a topic all but guaranteed to spark debate between legislators in Helena come January — whether able-bodied adults should be required to work to receive government-funded health insurance.
Republican Gov. Greg Gianforte has indicated he supports expansion with some form of work or education requirement. Democratic challenger Ryan Busse has said he is not in favor of further restrictions.
Dublois told the interim committee that he issued a public records request to the state health department to determine how many people enrolled in Montana Medicaid are currently working. His analysis found that 72% of able-bodied adults enrolled reported zero earned income in 2022, up from 54% in 2019.
By contrast, the Montana Healthcare Foundation offered data showing almost 80% of adult Medicaid enrollees are either working or attending school, and the program insures 30% of all food workers, housekeepers, personal care aids and child care workers in the state.
An April 2024 report from the Montana Department of Labor and Industry also concluded that the state's labor force participation rate has remained stable or increased in recent years.
During an event hosted by the Montana Free Press in Missoula earlier this month, Sen. Steve Fitzpatrick, R-Great Falls, and the majority leader in the Legislature's upper chamber, a nticipated conversations about Medicaid next session would be "hot and controversial."
Carly Graf is the State Bureau health care reporter for Lee Montana.
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