When Montanans talk about our state's unique Medicaid expansion, the first success touted is covering 96,000 low-income adults, most of whom are working at low-wage, part-time or seasonal jobs.
The second success is extending health care to so many Montanans with relatively little of that cost falling on Montana taxpayers.
Under federal law, the U.S. government paid 100 percent of the health care costs for these Montanans when the program started in 2016 with the provision that the federal share would gradually drop to 90 percent by 2020.
State lawmakers and the governor's office have negotiated with Montana hospitals to cover most of the state's share of preserving the Medicaid expansion. The hospitals have agreed to pay a new tax of slightly less than 1 percent on their outpatient revenue. In House Bill 425, introduced by Rep. Mary Caferro, D-Helena, the outpatient revenue tax would be split between funding Medicaid expansion and funding the overall state Medicaid program, which covers about 250,000 Montanans, mostly low-income children, elders and disabled persons.
Additionally, the hospitals have agreed and Caferro's bill proposes an increase in the inpatient utilization fee that hospitals have paid for years to help the state cover its share of Medicaid costs. That fee would rise from $50 per patient bed day to $70.
Why are Montana's community hospitals willing to pay higher taxes to support Medicaid expansion? Because every $1 the state (read hospitals) pay returns $9 to the state in federal dollars. Hospitals who take care of the most Medicaid patients will see the greatest return, which is only right because they are treating the neediest Montanans.
Medicaid expansion has eased financial struggles at most hospitals in Montana, Bob Olsen, senior vice president of the Montana Hospital Association, said in an interview last week. Among Montana's 46 small hospitals, about 15 are still operating on negative margins, according to data collected by MHA.
Montana lawmakers are home through Wednesday for a well deserved break from their Capitol jobs. Citizens who want to see Medicaid continue to cover Montanans should take this opportunity to make sure their representative and senator understand that there is a good, workable plan for sustaining the program and covering its health care costs.
Administrative costs for Medicaid expansion have been a small percentage of the care costs. The state has to pay a larger share of administration — up to 50 percent for such things as determining eligibility, billing enrollees for monthly premiums, claims processing and data analytics. Caferro's bill doesn't propose any new administrative expenses, but legislation being drafted for Rep. Ed Buttrey, R-Great Falls, most recently included numerous new mandates that would increase administrative costs, including: requiring enrollees to repeatedly verify that they had worked 20 hours every week or had that many hours devoted to "community engagement," or that they were exempt from those requirements. Buttrey is considering new assets tests that would require a determination of an applicant's vehicle and real property value and mandate a complex formula for charging a monthly fee to enrollees who own assets valued over a certain level. Presently, Medicaid eligibility and cost sharing is based on income.
Both Buttrey and Caferro were leaders in passing Medicaid expansion legislation in 2015. We thank and congratulate them for helping to drastically reduce Montana's uninsured population while bolstering the precarious finances of Montana hospitals, especially small hospitals.
In the second half of the 2019 session, the Legislature must extend Medicaid expansion — or it will expire on June 30. We call on lawmakers to continue the program with the parameters that have made it so cost-effective over the past three years. Beware of changes that would raise taxpayer costs more than benefits. Don't add complications that merely pile on red tape or result in truly needy Montanans losing their only health care coverage.
Montana Medicaid expansion should stay as simple and effective as proposed in Caferro's HB425.