Medicaid expansion could save Montana money in first 2 years

HELENA (AP) – After a 2013 legislative session in which Medicaid expansion failed by one miscast vote, a Republican bill touted as a compromise passed this year and was signed by Democratic Gov. Steve Bullock.

The expansion, which would allow about 80,000 low-income Montanans to become eligible to enroll in Medicaid, hasn’t yet been implemented and isn’t a foregone conclusion. The new law requires people who enroll to pay health care premiums that amount to 2 percent of their income. The federal government must approve a waiver for that stipulation and others before expansion can be implemented.

A two-month public comment period on the waiver is underway, and afterward, it will go to the federal government for another comment period and review.

As a result of the associated costs to enrollees, which also include paying copays at doctor visits, state officials predict about 45,000 people will enroll in Medicaid by 2020.

If implemented as soon as November, the costs of expansion in fiscal year 2016 and 2017 would be covered by the federal government. State funds would be needed for portions of the program, but they would be offset by federal dollars that are projected to save Montana about $11.5 million during that time, according to officials.

That’s because the plan will allow Montana to reduce state funding to several existing programs that provide services to uninsured people such as those with substance abuse treatment needs, according to Bullock spokesman Mike Wessler.

Federal funds from the expansion could also be used to pay the state’s obligation to provide acute hospital care to the incarcerated.

“Enrolling more state residents into the Healthy Montana Plan would help offset some of the spending on mental health that state and local governments are shouldering already,” Wessler said.

In fiscal years 2018 and 2019, Montana would incur costs from Medicaid expansion as contributions from the federal government gradually decrease to 90 percent. Montana’s cost has been projected at about $10 million in 2018, rising to about $17 million the following year.

States will be required to pay up to 10 percent of the costs by 2020.

Montana officials haven’t calculated cost estimates beyond 2020. Some lawmakers arguing against expansion said it could obligate the state to pay an estimated $50 million a year or more by 2020. The law as written calls for it to sunset by then, but it could be extended during future legislative sessions.