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Medicaid

Since January 2016, Montana’s expansion of Medicaid eligibility to all residents with very low incomes has saved the state millions, created thousands of new jobs and provided coverage to adults who otherwise had no insurance.

Those were conclusions of an analysis released last week by the University of Montana’s Bureau of Business and Economic Research. The project was commissioned by Headwaters Foundation and the Montana Healthcare Foundation, two nonprofit organizations based in Bozeman.

The reason Medicaid expansion has worked so well here is that state leaders crafted a plan to fit Montana, and because the federal government has paid the bulk of costs for the state’s 94,000 expansion enrollees. Meanwhile, Montana discontinued state-funded, non-Medicaid programs that had provided limited health care to some seriously mentally ill and chemically dependent people. Expansion allowed Montana to transfer some folks already on Medicaid that required state funding match of around 33 percent to the expansion program that was 100 percent federal money. The federal contribution is gradually decreasing from 100 percent to 90 percent over the next couple of years, but the state will still come out ahead financially when it pays 10 percent, according to the BBER analysis, which estimates that Medicaid expansion:

  • Added $270 million in personal income to Montana’s economy every year.
  • Created 5,000 jobs.
  • Contributed $500 million annually in increased economic output in our state.

One goal of Montana Medicaid expansion is increasing the number of people working. New Medicaid enrollees were offered job counseling and training. In the two years since Montana expanded Medicaid, the proportion of nondisabled, low-income adults ages 18-64 who are working increased from 56 percent to 64 percent. Low-income workforce participation increased in Montana even though there was no increase among higher income Montanans.

“Montana’s Medicaid expansion appears to be paying for itself and helping people re-enter the workforce,” said Dr. Aaron Wernham, Montana Healthcare Foundation chief executive in a statement last week.

The positive results that the BBER noted are similar to research findings in other expansion states.

“The strong balance of objective evidence indicates that actual costs to states so far from expanding Medicaid are negligible or minor, and that states across the political spectrum do not regret their decision to expand Medicaid,” Mark Hall wrote in a March 26 Brookings article. Hall reviewed numerous objective studies as part of the Leonard D. Schaeffer Initiative for Innovation in Health Policy.

None of the 32 expansion states have rescinded their programs and some now have five years’ experience. Republican governors in Arkansas, Arizona, Michigan, Nevada and Ohio support their state's expansion programs, Hall noted. Republican majority legislatures in Arkansas, North Dakota and New Hampshire have reauthorized their states’ initial expansion.

Montana lawmakers put a sunset on our program. It will end on June 30, 2019 — unless reauthorized by the 2019 Legislature.

Gov. Steve Bullock strongly supports the Montana program, but many Republican lawmakers opposed it in 2015 and still oppose it today. The program was enacted with overwhelming support from Montana’s health care providers, other business leaders and faith leaders.

One criticism of Montana’s program is that more eligible people signed up in the first two years than expected. In fact, getting more eligible people signed up quickly made the program more successful in reducing the state's uninsured rate, in getting more Montanans into the Medicaid program with the least cost to the state general fund budget.

"Many (but not all) expansion states have enrolled more people than they initially expected,” Hall wrote. State budgets have benefited because, on average, 20 percent of the expansion enrollees are people who were already covered by Medicaid, and were transferred from a program requiring a higher state contribution to the expansion program that will require no more than 10 percent.

In Montana, this common-sense approach to covering low-income (below $16,000 annual) workers and adults who are injured or ill has helped sustain financially struggling community hospitals and clinics. It made addiction treatment and other health care more accessible to all Montanans in need. It brought new money and jobs into our state and now covers nearly one in every 10 of us. Montana Medicaid expansion is a success that the 2019 Legislature should renew for the good of our health and economy.

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