What to know about Medicaid expansion at the start of the legislative session

As the 2025 legislative session begins, Montana is preparing for a political showdown over Medicaid expansion, a cornerstone of the state’s health care infrastructure. 

But what exactly is Medicaid expansion? How is it different from other Medicaid programs? What are lawmakers planning to debate? And what’s at stake for Montana residents? 

Here’s what you need to know. 

“MEDICAID EXPANSION” IS NOT THE SAME AS MEDICAID IN GENERAL 

When lawmakers talk about “Medicaid expansion,” they’re referring to just one part of the broader Medicaid system.

Think of Medicaid as a multi-legged stool built by the federal government but used by states. Each leg is a different Medicaid program meant to serve various categories of people. 

Congress created what’s known as “traditional Medicaid” in the 1960s. The joint project of the federal and state governments covers particular groups of low-income Americans, including children, pregnant women, elderly adults and people with disabilities. Montana administers benefits to residents, while the feds pay for most of the care people receive and set compliance standards for providers. 

The financing of traditional Medicaid is quite different from the equation for Medicaid expansion that we’ll dive into later. The federal government shares the cost burden with states that participate in the program. In Montana, if a provider gets $100 for an office visit with a Medicaid-covered patient, the federal government pays about $64 and Montana is responsible for roughly $36. That cost breakdown — currently 64% federal, 36% state — is known as a “federal medical assistance percentage,” or FMAP. 

Medicaid expansion is the most recent leg of the stool, designed for low-income adults not otherwise covered by traditional Medicaid. States had the option of adding this expanded Medicaid program to their health care systems after the passage of the federal Affordable Care Act in 2010. Montana is one of 40 states that decided to add coverage through Medicaid expansion. 

The feds created an even better FMAP rate for the expansion program to incentivize states to expand health care coverage to this new population. For a person covered by Medicaid expansion in Montana, the federal government pays 90% of coverage costs compared to a state share of 10% — financing that helps cover doctor’s visits, substance use disorder treatment, surgeries and more. 

WHO EXACTLY DOES MEDICAID EXPANSION COVER?

Medicaid expansion covers adults between the ages of 18 and 65 with incomes up to 138% of the federal poverty level. In Montana in 2024, that stacks up to about $1,700 of pre-tax monthly income for an individual and about $3,500 for a family of four. 

As of September, the number of Montanans covered by Medicaid expansion hovered around 77,400 people, compared to about 81,700 children and 45,700 adults enrolled through traditional Medicaid.

The number of people covered by Montana’s Medicaid expansion program rose above 125,000 in 2023 as a result of a pandemic-era federal policy that penalized states for removing people from any Medicaid program during the COVID-19 public health emergency, regardless of changes in their qualifications for the program. Enrollment figures across all Medicaid groups have dropped since state officials could again assess eligibility beginning more than a year ago. 

Several public health research groups and state agencies have analyzed trends in Montana’s Medicaid expansion program since lawmakers decided to adopt it a decade ago. Roughly 63% of Montanans covered by the program are from the state’s rural areas, compared to 36% from urban places, according to the Montana Health Care Foundation, a nonprofit health care advocacy group. Native Americans make up about 18% of the Medicaid expansion population, more than double their share of the state’s population. 

Lawmakers in Montana and other states have previously attached work requirements to Medicaid eligibility, though those amendments were later blocked from taking effect by the Democratic administration of President Joe Biden. 

Across both traditional and expansion programs, 66% of Montana adults enrolled in Medicaid report working part-time or full-time, and 11% report attending school. Another 12% cited a disability or other impairment to working, with 7% reporting being a full-time caretaker for someone else. 

WHY IS MEDICAID EXPANSION UP FOR DEBATE?

Montana lawmakers first passed a bill to create the program, called the Health and Economic Livelihood Partnership (or HELP) Act, in 2015, though with a four-year sunset provision. The Legislature decided to renew Medicaid expansion in 2019 but again included the caveat that the program end in 2025 unless lawmakers again agree to reauthorize it in the upcoming session. 

Like in 2019, the upcoming debate during the 90-day Legislature may result in changes to Montana’s Medicaid expansion program, including new work requirements, stricter eligibility assessments or limited benefits. With former President Donald Trump preparing to return to the White House in 2025, some lawmakers are hoping that the federal stance toward work requirements may shift again.

WHAT ARE THE POLITICAL DYNAMICS AT PLAY?

Medicaid expansion was originally authorized and re-approved in Montana by two majority-Republican Legislatures during the tenure of former Democratic Gov. Steve Bullock. Current Republican Gov. Greg Gianforte has also expressed general support for the program and said he will consider various forms of legislation passed by lawmakers this session. But the history of bipartisan support for Medicaid expansion does not mean an absence of conflict between lawmakers this session.

In the past, the bills to create Medicaid expansion have been sponsored by Rep. Ed Buttrey, R-Great Falls, who champions the program as a boon to business owners who can’t afford employee health insurance and workers who can’t afford private coverage. 

But many members of Buttrey’s party are staunchly opposed to the program, casting it as a government crutch for adults who could find other coverage options if they found higher-paying jobs. Others take issue with the size of the program and its impact on the state budget. The state paid less than $100 million toward Medicaid expansion coverage in the last fiscal year, with the federal government picking up about $870 million.

Democrats have historically supported Medicaid expansion and fought attempts to tighten eligibility requirements, citing the costs of additional bureaucracy that can make it harder for qualified people to maintain coverage for essential health care. 

If lawmakers decide to let the program end, supporters say thousands of Montanans risk becoming uninsured. Others may be eligible for coverage under traditional Medicaid, though the state would shoulder more of the cost for their care than it would if they remained on Medicaid expansion, because of the difference in federal cost-share agreements.

Other proponents tout Medicaid expansion as an economic lifeline for Montana’s hospitals, particularly in rural areas. Without steady reimbursements for low-income patients, providers say, they’d take a financial hit by caring for uninsured patients who arrive in their emergency departments. 

Several Montana lawmakers have already requested bill drafts related to Medicaid expansion, including proposals to phase out the program entirely, make it permanent, or change the recurring sunset provision. As of the first week of the session, legislators had requested 44 Medicaid-related draft bills, several of which have to do with expansion. At least one is already scheduled for a hearing.

This article was updated on Jan. 9, 2025, to correct a reference to state Medicaid spending.