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Future of Medicaid expansion uncertain as HELP Act sunset nears

Amid a hotly contested citizens’ ballot initiative that would establish long-term funding for Medicaid expansion, and a study touting Medicaid’s economic and social benefits, policymakers are keeping close tabs on the future of a program that provides health-care coverage for nearly 1 in 10 in Montanans.

Medicaid expansion, which has resulted in more than 96,000 low-income Montanans receiving health-care coverage, is set to sunset, or expire, June 30, 2019. Sen. Ed Buttrey, the sponsor of the 2015 Montana Health and Economic Livelihood Partnership (HELP) Act that enacted expansion, wrote the sunset provision into the law as a safeguard, creating an opportunity to work out kinks or disband the program if the Legislature deems it a bust.

Courtesy / Montana Legislature

Sen. Ed Buttrey, R- Great Falls

Buttrey, a Great Falls Republican, said the HELP Act has brought federals dollars Montanans paid into the Affordable Care Act back home to Montana and created savings for the state.

“It also created a lot of jobs and it created a lot of personal income for folks who may not have had an opportunity for that income,” Buttrey said, referencing the positive impact stable physical and mental health has on workers’ ability to secure and retain employment. “The HELP Act has done a lot of good.”

Medicaid expansion passed with bipartisan support. A quarter of Senate Republicans and nine-tenths of Senate Democrats voted to pass the HELP Act in 2015. It passed the Republican-controlled House 54-42 with 13 Republicans joining all of the body’s Democrats in voting in favor of the bill.

As of Sept. 1, 9.4 percent of Montanans have enrolled in the expanded Medicaid program, which is available to adults living on incomes up to 138 percent of the federal poverty level. A single person whose income is $16,753 or less is eligible for Medicaid under the expansion.

According to data compiled by the Department of Public Health and Human Services, more than 85,000 adults have received preventative services under the expansion, including more than 6,200 colon cancer screenings, 6,700 breast cancer screenings and nearly 1,800 hypertension diagnoses. Additionally, 27,700 individuals received outpatient mental health services and 5,300 people underwent outpatient substance abuse treatments under expanded Medicaid coverage.

Courtesy / Montana DPHHS

Note: Providers have up to one year to bill a service. Figures are current as of paid date Sept. 2, 2018.

Ballot initiative I-185 would remove the sunset on the 2015 expansion and provide up to $26 million per year to help fund it by raising the tax on tobacco products.

The federal government paid 100 percent of the costs of expansion in 2016. If Montana continues the expansion program, then by 2020 the state will cover 10 percent of the cost. If enrollment in the program plateaus as expected, the cost to the state in 2020 is expected to be $60.9 million, according to report by the University of Montana’s Bureau of Business and Economic Research (BBER).

The tax on a pack of cigarettes would increase by $2, the first such hike in 13 years. E-cigarettes and vaping products would be taxed at 33 percent of wholesale price. I-185 would also fund suicide prevention programs in schools and for veterans, and tobacco cessation and prevention programs.

Recent polling indicates that the likelihood of I-185, the Extend Medicaid Expansion and Increase Tobacco Taxes Initiative, passing into law is too close to call. A poll conducted by Montana State University and Montana Television Network from Sept. 15 to Oct. 6 found that registered voters who plan to support the initiative have a razor-thin advantage over those who indicated they would vote against it. More than 2,000 survey responses were tallied, with 41.4 percent in favor of the initiative, 40.8 percent opposed, and 17.3 percent undecided. The poll has a 2-percentage-point margin of error.

Analysis by the Associated Press found that Altria Client Services, the lobbying arm of the makers of Marlboro cigarettes, has contributed more than $17 million in cash loans and in-kind donations to defeat I-185. Initiative supporters have been aided by $5.4 million in contributions from the Montana Hospital Association as well as hundreds of thousands of dollars donated by labor unions and an advocacy group called the Fairness Project.

John S. Adams / Montana Free Press

Anti-I-185 advertisements are posted on convenience store check-out counters all over Montana. The Altria-funded group “Montanans Against Tax Hikes” paid for the ads.

 

Ads circulated by Montanans Against Tax Hikes argue that I-185 fails to generate adequate funding to pay for Medicaid expansion, and that Montana taxpayers will be left on the hook to permanently fund “a massive entitlement program.”

“Big Tobacco has now spent more money on opposing I-185 than any other citizens’ initiative has faced in Montana history, all to protect profits,” American Heart Association government relations director Amanda Cahill said in an emailed statement.

“The funding raised by this initiative is the funding needed, end of story. With I-185, the citizens of Montana have the opportunity to say that we’re tired of picking up the tab for big tobacco’s impact on rising health care costs.”

The Montana Chamber of Commerce has come out in opposition to the initiative.
“It violates the principles of good tax policy: it is not broad-based, reliable, or fair,” the organization wrote in a press release. “Given the complexity of [a tax increase and Medicaid expansion] this ballot initiative unnecessarily circumvents the legislative process and a thorough, informed discussion.”

Bridger Malum, the chamber’s government relations director, said its board conducted a thoughtful discussion about I-185 in June. He said the board supported Medicaid expansion in 2015 and still supports the program, but concluded it would be ill-advised to tie funding for such an important program to tax revenues from a single industry—“especially one in which the revenues aren’t necessarily stable.”

Courtesy / Montana Chamber of Commerce

Bridger Mahlum, Montana Chamber of Commerce Government Relations Director

Malum added that he anticipates legislators will take up Medicaid expansion again in the upcoming session. “I think there’s plenty of legislators who are interested in having a thoughtful debate about this in the legislative process,” he said.

During the most recent regular session, in 2017, Gov. Steve Bullock, a Democrat, and the Republican Legislature struggled to reach consensus on the budget, particularly allocations to the Department of Public Health and Human Services, which accounts for the largest share of the state’s budget.

To date, 33 states and the District of Columbia have opted-in to Medicaid expansion. On Nov. 6, voters in Idaho, Nebraska and Utah will vote on ballot initiatives that would implement the program for the first time.

Buttrey said Montana took a unique approach by tying health care to economic development and introducing safeguards—the sunset provision and an oversight committee, for example—into the bill.

Buttrey, who has termed out of the Senate and is running for a seat in the House, is a non-voting, ex-officio member of the oversight committee, which was charged with compiling and synthesizing data on the program’s efficacy.

In August the committee issued its recommendation to Bullock and the Legislature: that the program continue, and that “one way or another, the state’s budget has the money to fund the state’s small share of the cost.” The committee recommended the continuation of HELP-Link, a program also established by the HELP Act that provides workforce training and removes barriers to employment. It also recommended that data be used to inform state efforts to reduce unnecessary, fraudulent, duplicative and wasteful expenditures in Medicaid and HELP-Link.

The committee report included information about fraud in the Medicaid system from 2016, the most recent year for which data is available. That year, the Montana Fraud Control Unit initiated 55 investigations and indicted or brought charges based on seven. Of those, all but one resulted in a conviction.

Medicaid expansion has proven to be a boon for hospitals and clinics that serve rural areas where impoverished and uninsured patients are often unable to pay for care. Under the HELP Act, Montana hospitals saw a 49 percent decrease in uncompensated care, and community health centers in the state saw an $11.7 million increase in Medicaid revenue, according to the report.

Lander Cooney is the CEO of Community Health Partners (CHP), a nonprofit that provides medical, dental and behavioral health care to more than 11,000 patients in south-central Montana annually. Cooney said Medicaid expansion has allowed her organization to “cautiously invest” some of that increased revenue. Payment for previously uncompensated services, or services that were reimbursed at a lower rate (CHP uses a sliding fee scale based on patients’ ability to pay) has allowed CHP to remodel its Livingston clinic and update a computer server room.

Courtesy / Community Health Partners

Lander Cooney, CEO Community Health Partners

Cooney added that the expansion makes it easier for previously uninsured individuals to seek care before illness or disease necessitates an expensive emergency room visit.

“When patients get the green light to participate fully in the health-care system, they start seeking care earlier. They don’t wait until things are an emergency, [when] they’re having a heart attack and getting care at the most high-cost point in the whole system,” Cooney said.

CHP’s board endorses I-185.

“I think, from an organizational perspective, 100,000 Montanans who have gained coverage, who were previously uninsured, is vital to our state’s health and well-being,” Cooney said, adding that there’s an added benefit to the measure in its funding for tobacco-cessation programs.

Proponents of Medicaid expansion were encouraged by an April 2018 report prepared by BBER that estimated expansion would introduce $350 to $400 million in new spending into Montana’s economy each year, provided enrollment numbers plateau near current levels. Initial enrollment in Montana’s Medicaid expansion program was higher than expected. According to analysis of data from other states, enrollment tends to plateau within 24 months of expansion.

The Bureau of Business and Economic Research’s April 2018 report on Medicaid Expansion.

The report notes that in addition to statewide economic benefits, such as the 5,000 jobs created (primarily in the health-care industry), the program appears to lead to better health outcomes and higher participation in the workforce, while also lowering crime rates and medical debt.

“While the state pays a nominal amount of these benefits, the costs to the state budget are more than offset by the savings created by Medicaid expansion and by the revenues associated with increased economic activity,” according to report authors Bryce Ward, who heads the BBER’s Health Care Research Program, and Brandon Bridge, an economist with the bureau and its director of forecasting.

In 2017, Medicaid expansion created approximately $39 million in savings to the state by, among other things, reducing the cost of inmate care, reducing state payment for mental health and substance abuse services for low-income Montanans, and reducing the amount of uncompensated care.

Buttrey said that positive economic impact was part of the HELP Act’s design, but he didn’t expect to see such strong figures come out of the labor market. Participation in the labor force among low-income Montanans age 18 to 64 increased by 6 to 9 percentage points, and BBER credits Medicaid expansion with that outcome.

“We [created] a very unconventional system with our HELP Act—we matched economic development and health care, which hadn’t been done,” Buttrey said. “There are a lot of states that have looked at our solution, and they’re going more toward a Montana solution, updating it for the federal changes.”

Buttrey added that he’s hopeful the Legislature will have the opportunity to do a full evaluation of the program during the next session.

“It’s an extremely complex program, there’s a lot of dollars in play, and it’s our job to look at how taxpayer money is being spent and allocated. I think we’ll need to do that [regardless] of the outcome of I-185.”

Our reporting on health care issues is funded in part by a grant from the Montana Healthcare Foundation.