MEDICAID IN MONTANA
Choices Ahead for Our State
Medicaid expansion has been a hot topic in the past year. Montana was one of the states that did not pass the expansion, but the topic may be revisited.
The dynamics behind the expansion of the Medicaid program and its impact on state budgets is a topic of considerable controversy and differences of opinion. Many states have attempted to estimate the impact of the Medicaid expansion on their rate of uninsured, the health of their population, and the budgetary impact on state finances. There are many moving parts to Medicaid, and no study to date has incorporated all aspects of the Medicaid expansion.
The Supreme Court’s early summer ruling on the Affordable Care Act (ACA) makes the expansion of Medicaid programs optional for states without penalty. Under the ruling, federal funding for a state’s Medicaid program may not be terminated if the state chooses not to expand Medicaid to all residents with incomes up to 138 percent of the federal poverty level ($32,000 for a family of four).
Some states, including Florida, Louisiana, Mississippi, South Carolina, Georgia, and Texas, have decided they will not expand the Medicaid programs in their states, claiming it would place an undue burden on their state finances. A number of states are leaning toward the expansion, but the vast majority of states are undecided. Montana is among the undecided.
Medicaid is a health insurance program jointly funded by the federal government and the states. Although states have considerable flexibility in the design and administration of their Medicaid programs, certain groups must be covered for certain categories of services. Generally, eligibility has been restricted to low-income children, women who are pregnant, the parents of dependent children, the elderly, and people with disabilities. Recent changes, however, will now expand eligibility to childless adults.
If states choose to expand, most of their costs for newly eligible adults would begin three years after the expansion and would be capped at 10 percent in 2020 and thereafter. For the first three years of the expansion, the federal government would pay 100 percent of the cost for all newly eligible Medicaid beneficiaries.
The Medicaid expansion represents the single most significant new cost for states under the ACA. But at the same time, the addition of federal dollars will support many jobs and provide additional stimulus to the economy. Lots of uncertainty remains as states attempt to weigh the merits of the expansion against the financial strain on their budgets. Following is the Bureau’s effort to model the Medicaid expansion, but it is in no way conclusive nor inclusive of all the potential new costs or savings. Medicaid expansion has been a hot topic in the past year. Montana was one of the states that did not pass the expansion, but the topic may be revisited.