AutoInsuranceMM.Info – What is the Insurance – Montana and the ACA’s Medicaid expansion
Expanded Medicaid became effective January 2016
On November 2, 2015, CMS approved Montana’s Medicaid expansion waiver under the Affordable Care Act (ACA). Enrollment became available immediately, for coverage effective January 1, 2016. Under the expanded guidelines, Medicaid is available for all adults with incomes up to 138% of poverty (Medicaid and CHIP rules for children and pregnant women are higher, and remain unchanged by the waiver approval). Montana’s Medicaid expansion waiver came about as a result of Montana’s 2015 Senate Bill 405.
Montana’s Medicaid expansion waiver calls for enrollees to pay 2 percent of their income in premiums, which the state says average about $26 per month (enrollees with income over the poverty level can be dis-enrolled if they fail to pay premiums by the end of a 90-day grace period; those below the poverty level are not dis-enrolled, but their past-due premiums can be deducted from future state income tax refunds). As of June 2016, the state had collected about $1.1 million in premiums, and 379 people with income above the poverty level had been dis-enrolled for failing to pay premiums. Montana Medicaid enrollees who are dis-enrolled as a result of non-payment of premiums are barred from re-enrolling for three months.
In 2017, CMS began the process of auditing Montana’s Medicaid expansion program to determine whether the premiums and co-pays in Montana’s expansion waiver have helped to encourage enrollees to seek care in facilities that are less expensive than the emergency room, and also to determine whether the copays and premiums have served as an obstacle to enrollment and access to care.
Ballot initiative would generate funds to continue Medicaid expansion past 2019. 25k signatures needed
Montana’s Medicaid expansion waiver is effective for five years, from 2016 through 2020. However, it’s contingent upon the state legislature reauthorizing the program after June 30, 2019. If lawmakers do not approve reauthorization, Medicaid expansion would end as of July 2019. To avoid the sunsetting of the program, proponents of Medicaid expansion are gathering signatures to get a measure on the ballot that would use increased tobacco taxes for fund Medicaid expansion.
Initiative I-185 was approved by the state for signature gathering in mid-April. Supporters have until June 22, 2018, to gather 25,468 signatures, in order to get the measure on the ballot. If that happens, and assuming voters approve it, the tax on a pack of cigarettes would increase by $2 (to $3.70) and taxes would increase by 33 percent for other tobacco products, like e-cigarettes.
The ballot initiative would compel Montana to cover the state’s share of the cost of Medicaid expansion, using the tobacco tax money. Through 2016, the federal government paid the full cost of Medicaid expansion; states are now responsible for 6 percent of the cost; that will grow to 7 percent in 2019 and 10 percent in 2020 and beyond. The tobacco tax is expected to generate $74 million per year by 2023, but Montana lawmakers estimate that the state’s portion of the cost of Medicaid expansion could reach $150 million for Medicaid expansion in 2019, and $200 million in 2020, so the state would also have to come up with additional revenue.
91,563 enrolled by early 2018
By December 31, 2015 enrollment in Montana’s expanded Medicaid had already reached 20,000 people, and their coverage became effective January 1. The state had projected 23,000 enrollees by mid-2016, and they more that doubled that amount, with 47,399 people enrolled in expanded Medicaid by July 2016.
By early 2017, enrollment in Montana’s expanded Medicaid had reached 71,000, and more than 33,600 of them had received preventive care services in 2016, including 19,000 cancer screenings.
And by January 2018, enrollment had grown to 91,563. Total Medicaid/CHIP enrollment in Montana grew by 78 percent from late 2013 to October 2017, an increase driven mainly by Medicaid expansion.
Prior to expansion, officials projected that coverage would become available to about 70,000 of Montana’s lowest-income residents (the range was 45,000 to 70,000). They expected about 45,000 of them to enroll in expanded Medicaid by 2020. That projection was clearly too low, as more than 91,000 had enrolled by early 2017. Medicaid eligibility determinations spiked in Montana in late 2015/early 2016, but continued to rise substantially throughout 2016, and grew by 20,000 people in 2017. It’s likely that they’ll level off within the next year or two.
As of early 2017, nearly 30,000 of the newly-eligible population (with incomes between 100 percent and 138 percent of poverty) were people who were previously eligible for subsidies in the exchange, but Medicaid provides them with much lower cost-sharing.
About 40,140 Montana residents were in the coverage gap in 2014 and 2015, but they now have access to Medicaid coverage. Mostly adults without dependent children, or those with children who live a little below the poverty level, these individuals were not previously eligible for Medicaid in Montana, and they were also not eligible for premium subsidies because their income was too low. Subsidies are only available for people with incomes of at least 100 percent of poverty, because everyone below that level was supposed to get Medicaid. Medicaid expansion eliminates the coverage gap.
Governor Steve Bullock’s office has estimated in September 2016 that there were still 9,000 uninsured veterans in Montana, many of whom have low incomes; the governor has touted expanded Medicaid as a good option for these veterans.
Paying for expansion: State saving $22 million in FY 2017
The higher-than-expected enrollment in the first year of Montana’s Medicaid expansion has different implications depending on perspective. On one hand, increased coverage levels result in fewer people without health insurance and reductions in uncompensated care for hospitals (uncompensated care occurs when hospitals treat uninsured patients, and it threatens the viability of hospitals, particularly in rural areas; rural hospitals are especially reliant on Medicaid expansion).
But higher-than-expected enrollment translates to higher-than-expected costs for the Medicaid program, particularly at the federal level, since the federal government picks up most of the tab. States are responsible for paying 5 percent of the cost of covering the newly eligible population in 2017, and that will rise to 10 percent by 2020, assuming the ACA’s Medicaid expansion remains in place.
Although the state is covering more people than projected — and is responsible for 5 percent of the cost in 2017 — Medicaid expansion is still saving the state a significant amount of money. For the 2017 fiscal year (which ends June 30, 2016, in Montana), Montana projects $22 million in savings for the state’s general fund as a result of Medicaid expansion.
The savings are projected to continue at a rate of $1.5 million per month after that. The savings are attributed to the fact that some of the Medicaid expansion population was previously covered under limited benefit Medicaid in Montana, which was funded at the regular match rate (35 percent from Montana, 65 percent from the federal government). Those individuals are now covered under expanded Medicaid, which is covered almost in full by the federal government.
Including Montana, 31 states plus the District of Columbia have accepted federal funding to expand Medicaid. Under the AHCA, which was introduced to repeal or change many of the ACA’s spending-related provisions in March 2017, the enhanced federal funding for the Medicaid expansion population would no longer apply to new enrollees after the end of 2019 (states would have the option to continue to enroll people, but only at their normal federal funding rate — about 65 percent in Montana).
Montana agrees to expand Medicaid
On April 29, 2015, Montana Governor Steve Bullock signed Senate Bill 405 into law. The legislation called for Medicaid expansion for all adults with incomes up to 138 percent of poverty (children were already eligible for Medicaid or CHIP with household incomes in excess of that amount). It has a sunset clause however, ending the program as of June 30, 2019. So it would need to be reapproved by lawmakers in order to continue past that date.
But proposal needed CMS approval
Any version of Medicaid expansion that places additional requirements or restrictions on enrollment must be granted a waiver from CMS in order to receive federal funding. Montana’s legislation deviated from the straight Medicaid expansion called for in the ACA; bill sponsor Ed Buttrey (R – Great Falls) called it the “most conservative plan in the US.”
SB405 called for newly-eligible enrollees to pay 2 percent of their income in premiums, and it also imposes copays for some medical services. In addition, the legislation included a job training and workforce assessment program, aimed at helping enrollees secure a job or move into a better job (this aspect of the legislation was not included in the official waiver proposal that was submitted to CMS; that is clarified on page 26 of the waiver proposal, and was brought up as a concern in August by Montana Representative Art Wittich. Work and job training requirements have generally not been approved by CMS when included in other states’ Medicaid expansion proposals).
So although SB405 was the law of the land in Montana, the state still needed to get approval from CMS to proceed with their modified version of Medicaid expansion. On July 7, 2015, the state posted the waiver application and began a 60 day public comment period. Montana residents had an opportunity to comment on the proposal online, and there were two public meetings about the proposal in August.
On September 15, the state submitted their Medicaid Section 1115 demonstration waiver proposal to CMS for review. Official changes to Medicaid eligibility were dependent on federal funding for expansion, which required CMS approval of the state’s waiver. The state had asked CMS to approve the waiver by the beginning of November, and was hoping to have expanded Medicaid coverage available by January 2016. The waiver was approved on November 2, 2015. Expanded Medicaid coverage took effect in Montana on January 1, but eligible residents were able to begin enrolling immediately following the waiver approval.
Blue Cross Blue Shield managing expansion program
While Montana’s Section 1115 waiver was being reviewed by CMS, the state completed the bidding process to find a private insurer to manage the Medicaid expansion program in the state. Blue Cross Blue Shield of Montana scored highest in the bidding process, and signed a contract in December to be the administrator for the expanded Medicaid program.
BCBS of Montana had been working on infrastructure even before the Medicaid expansion waiver was approved, and began focusing on outreach and consumer education once the waiver was approved.
Keeping Montana tax dollars in Montana
Because Montana didn’t initially expand Medicaid, it was projected that the state would miss out on $2.1 billion in federal funding from 2013 to 2022. If the state had not expanded Medicaid, Montana residents would have paid $705 million in federal income taxes over the next eight years to fund Medicaid expansion in other states, while receiving no Medicaid expansion funds for their own state.
The federal government will pay the full cost of Medicaid expansion through 2016. After that, the state gradually pays a small portion of the cost, but it will never exceed 10 percent. Estimates vary, but over the next two years it’s expected that Montana’s share of the cost of Medicaid expansion will be somewhere in the range of $400 million to $700 million.
With coverage expansion in place, Montana is expected to save $11.5 million in the next two years, due to the fact that Medicaid expansion will eliminate the need to fund current programs for uninsured residents (by March 2016, the state reported that it had already saved $3 million). In 2018 and 2019, the state is expected to pay about $10 million and $17 million, respectively, to cover the state’s portion of the cost of Medicaid expansion (that pales in comparison to the more than two billion dollars the state will get in federal Medicaid expansion funding over the coming decade).
Governor, citizens pushed for expansion in 2015
Democratic Governor Steve Bullock has long supported Medicaid expansion, and a poll conducted by the Bozeman Chronicle in the spring of 2014 found that 74 percent of nearly a thousand respondents were in favor of Medicaid expansion.
In 2013, the Republican majority in the state legislature blocked measures to expand Medicaid following a design similar to what Arkansas has used, despite some bipartisan support. Then in 2014, supporters of Medicaid expansion worked to get a Medicaid expansion initiative on the November 2014 ballot, but ultimately fell short in their signature collection process, announcing in June that they would not be able to gather the required number of signatures by the deadline.
Supporters of Medicaid expansion, including Governor Bullock and the Healthy Montana Campaign, vowed to renew the issue during the 2015 legislative session, and the bill that was ultimately signed into law in April 2015 was sponsored by a Republican (Ed Buttrey, a Senator from Great Falls).
Who is eligible for Montana Medicaid?
In addition to low-income elderly residents and those who are disabled, Medicaid is available to the following populations in Montana:
- Pregnant women with household incomes up to 157% of poverty.
- Adults with household income up to 138 percent of poverty (coverage effective dates will begin January 1, 2016; enrollment became available November 2, 2015)
- Children are eligible for Medicaid if their household incomes are up to 143 percent of poverty. Above that level, they are eligible for CHIP if their household incomes do not exceed 261 percent of poverty.
- Cancer screening services are available to residents with household incomes up to 200 percent of poverty.
How do I apply?
- You can apply at HealthCare.gov at any time – Medicaid enrollment is available year-round.
- You can also apply online at apply.mt.gov anytime during the year.
- You can also apply over the phone with HealthCare.gov by calling 1-800-318-2596.
- You can apply in-person at any of Montana’s Offices of Public Assistance.
- You can print a paper application and mail or deliver it to an Office of Public Assistance. The application will determine your eligibility for a variety of public assistance programs in addition to Medicaid.
Montana Medicaid history
Medicaid became effective in Montana in July 1967, putting the state around the middle of the pack in terms of implementing the program.
As of June 2011, Montana’s Medicaid program was providing coverage for 60,800 children, 19,900 adults, 10,500 elderly, and 19,600 disabled residents. A total of 178,846 people had coverage in Montana’s Medicaid/CHIP prorams as of June 2015, which was an increase of 20 percent over the 148,974 people who had coverage at the end of 2013.
The increase occurred despite the fact that Montana’s Medicaid expansion didn’t take effect until 2016, due in part to several improvements the state had made to the Medicaid program over the preceding few years. In 2011 and 2012, payment rates for providers were increased. In 2011, the state expanded the existing eligibility rules, and also simplified the application and renewal process. And in both 2011 and 2012, Montana expanded the long term care portion of its Medicaid program.
By January 2017, after the expanded guidelines had been in place for a little over a year, total Medicid/CHIP enrollment in Montana had grown to 246,548 people — a 66 percent increase since the end of 2013.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.