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Medicaid expansion will be up for debate in 2025 legislative session, and its future is uncertain

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Medicaid expansion will be up for debate in 2025 legislative session, and its future is uncertain

Apr 02, 2024 | 6:49 pm ET
By Nicole Girten
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Medicaid expansion will be up for debate in 2025 legislative session, and its future is uncertain
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Recent polling from ALG Research and Lake Research Partners conducted on behalf of Consumers for Quality Care shows that nearly 50 percent of Montanans are in favor of policymakers passing legislation to bring down healthcare costs. (Getty Images)

Medicaid expansion is going to end next summer unless lawmakers decide to re-up the program next legislative session.

Before expansion, Medicaid only covered extremely low-income Montanans, but under expansion, the program extended health insurance to those at or below 138% of the federal poverty level– currently $28,200 for a two-person household– for about 100,000 Montanans.

Medical professionals said expansion resulted in not only more people getting insurance, but also funds more services within hospital systems for all patients. They said the program has net benefits to the state budget and local economies.

Democrats are hopeful to pass legislation to re-new expansion in Montana, and say Republicans’ poor handling of Medicaid redetermination– the process of removing ineligible participants from Medicaid– is a “harbinger” for how they would handle Medicaid expansion, if at all.

But Medicaid expansion costs a pretty penny– roughly $100 million— and some Republicans worry the federal government won’t always pay its share, and may leave the state in the lurch down the line. Similar concerns were raised before the state expanded the program, too.

The federal government passed Medicaid expansion in the Affordable Care Act in 2010, giving states the opportunity to opt into the program with the feds paying 90% of the bill for the program.

Montana was close to passing Medicaid expansion in 2013, but it failed in a close vote on the House floor. Legislators went on to pass expansion in 2015 and to continue the program in 2019, but added a sunset date for the program set for June 30, 2025.

Montana Healthcare Foundation: Expansion is a ‘win, win’

CEO of the Montana Healthcare Foundation Dr. Aaron Wernham said Medicaid expansion in the state for the last decade has had profound positive effects across the board.

Wernham said at its peak, Medicaid expansion covered one-in-10 Montanans, cutting the uninsured rate in half. He said specialized care for substance use and mental health– programs that were previously funded with state general funds and grant dollars– grew under Medicaid expansion.

“Those are services that are available generally to everyone, not just Medicaid enrollees,” Wernham said. “If 10%, or in some communities even 20%, of your population is uninsured, it’s much harder to make a new service viable economically.”

Rural hospitals would be hit especially hard if Medicaid expansion wasn’t re-upped, with healthcare consultant firm Chartis saying in a recent report rural hospitals in states without expanded Medicaid “have consistently performed worse financially than their expansion state counterparts.”

Wernham said it can become dangerous if people go from having a hospital within 10 or 20 miles, to the closest option being 100 or 150 miles.

Wernham said although Medicaid expansion may seem at the outset to have a hefty price tag, in practice, it’s actually a net benefit to the state. Under expansion the state pays 10% of the bill, $100 million, while the feds pick up the rest. Without expansion, the state would be looking at paying upwards of 30% to cover the same people with a higher percent match rate– meaning it would be more expensive. Hospitals under expansion also pay into the program with a fee as part expansion, which Wernham said is a “win-win.”

“Because the hospitals have a payer source, but they also then help pay part of the state’s share of those costs,” Wernham said.

Hospitals hiring more and offering more services spurs economic growth, he said. For each year expansion has been in effect, enrollees overall had fewer emergency room visits and hospitalizations.

Wernham said the governor and the legislature have been effective in seeking to strengthen the state’s behavioral health infrastructure– noting the increases to Medicaid provider rates, as well as the commission to advise Gianforte on how to spend $300 million in mental healthcare, and the governor’s own initiative, the HEART fund.

“If you think of those investments, as buying your kid a beautiful new truck, they still need gas to put in the engine to make it go,” Wernham said.

“$300 million is a lot of money, but it’s only one time, it’s going to stand up services that need a source of reimbursement in order to keep operating,” he said. “Similarly, with provider rate increases, those are Medicaid rate increases, but if you don’t have Medicaid coverage, then they won’t help anyone.”

Legislators don’t all see eye to eye on expansion

Rep. Mary Caferro, D-Helena, said she was called “Medicaid Mary” for her advocacy efforts in the statehouse to get expansion across the finish line– which featured some close votes and political drama through the years. She said in 2015 lawmakers heard seven hours of testimony in favor of a democrat’s bill for expansion, but it died the same day in committee.

She said the parties did come together that year to pass expansion into law, and going into 2019 she said the data proving positive health outcomes and cost efficiency was on their side.

“We went into 2019 with a lot of data behind us to say, ‘This is what we predicted and it’s come true,’” Caferro said.

And again in 2019, expansion passed, she said because politicians of both parties and the public had “shoulder to the plow and we’re moving in the same direction.”

The 2019 legislation was sponsored by Rep. Ed Buttrey, R-Great Falls, and had bipartisan support.

The 2019 legislation also tried to add work requirements for participants, which Rep. Bill Mercer, R-Billings, described in an interview Tuesday as a “carrot” for legislators like himself who weren’t convinced expansion was a good idea. But the federal government intervened to not allow the state to institute work requirements.

Mercer was opposed to Medicaid expansion during his freshman session in 2019 and is still a “hard no” on the issue in the upcoming session.

Mercer said his concern is in part about the federal government’s ability to afford to spend on programs like Medicaid, and worries the state will be in a position eventually where the federal government won’t be fronting as much of the cost as they currently are– and the state wouldn’t be able to make up the difference.

“I don’t think the federal government can afford it,” Mercer said. “And as the federal government is increasingly unable to afford it, there, I think, is a big risk that our percentage share as a state administered program is going to go up.”

House Minority Leader Kim Abbott, D-Helena, rebutted this point at a press conference Tuesday, saying the state should be taking advantage of what the federal government is paying, and should that amount ever change, that would be a policy question for future legislators.

Mercer said he thought the federal government fronting 90% of the program costs was intentional to get states to participate and have more people on government insurance programs, which he saw as bad policy.

“Anytime you start a government program, it’s extremely difficult to unwind it,” Mercer said. “The longer we’re down the road, the more difficult it will be to unwind it.”

Mercer said hospitals are going to be proponents for expansion because for them it means a big payday. He wasn’t swayed by the hospitals saying it brings benefits to the community in 2019, and said he wouldn’t be in 2025 either.

Medicaid expansion in the shadow of redetermination

Caferro attributed the bill getting passed in both 2015 and 2019 to having a Democrat, former Gov. Steve Bullock, in the executive office. But she’s not as hopeful about whether it will pass if Gianforte remains in office.

Democrats worry experience with Medicaid redetermination may foreshadow how Medicaid expansion would be handled

Democrats, including Gianforte’s opponent in the race for Governor Ryan Busse, critiqued Gianforte’s leadership during Medicaid redetermination– a process states use to confirm whether Medicaid participants are still eligible after the pandemic had allowed people to keep insurance for longer than usual, and those permissions were ending.

About 127,000 Medicaid recipients lost insurance, with the predominant reason being they failed to return paperwork to the department to stay on their insurance.

The Secretary of Health and Human Services sent a letter to the administration in December saying Montana was one of nine states with the highest percent of children losing coverage and made suggestions for the department to make it easier for participants to renew insurance coverage.

The state released data last month showing 35,797 kids lost insurance coverage and 12,781 Native Americans lost coverage in the last year.

A spokesperson for Gianforte’s office said in an emailed response to questions the federal government accepted their redetermination plan in January and Gianforte has “been clear that the safety net must be intact for the most vulnerable who truly need it, and DPHHS’ redetermination process has ensured the safety net doesn’t collapse with those ineligible for the program weighing it down.”

Busse said redetermination was a “harbinger” for how Medicaid expansion would be handled in 2025.

Busse said if you want to know how Republicans are going to treat Medicaid if given the chance again, “just look at how they’re treating it right now.”

Editor’s Note: This story has been updated with comments from Gov. Greg Gianforte’s office