Montana and the ACA’s Medicaid expansion: eligibility, enrollment and benefits



montana Medicaid guide

Medicaid expansion in Montana

Expanded Medicaid became effective January 2016

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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.

Medicaid expansion in Montana was initially approved through June 2019. Montana voters rejected an initiative in 2018 that would have permanently expanded Medicaid in the state and imposed a tobacco tax to fund the state’s portion of the cost. But in 2019, Montana enacted legislation that extends Medicaid expansion in the state for another six years, albeit with a work requirement that will need federal approval in order to be implemented.

Total Medicaid/CHIP enrollment in Montana grew by 87 percent from late 2013 to February 2019, an increase driven mainly by Medicaid expansion. After increasing steadily in 2016 and 2017, total enrollment in expanded Medicaid has been mostly steady since early 2018. As of April 2019, there were 95,246 people enrolled in expanded Medicaid in Montana.

Since the expansion program began in 2016, nearly 98,000 enrollees have received preventive services, 33,000 enrollees have received outpatient mental health services, nearly 9,000 women have received breast cancer screening (and 123 cases of breast cancer have been diagnosed), and more than 1,000 enrollees have been newly diagnosed with diabetes and are receiving treatment for the disease.

Ballot initiative would have generated funds to continue Medicaid expansion past 2019, but voters rejected it

Montana’s initial 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. Without legislative reauthorization, Medicaid expansion would have ended as of July 2019. To avoid the sunsetting of the program, proponents of Medicaid expansion gathered signatures in 2018 to get a measure on the ballot that would have increased tobacco taxes to fund ongoing Medicaid expansion and eliminate the current sunset provision.

Initiative I-185 was approved by the state for signature gathering in April 2018. Supporters then successfully gathered more than the 25,468 signatures necessary in order to get the measure on the ballot, and spending for and against the measure turned it into the most expensive ballot initiative in Montana’s history (tobacco manufacturers funded much of the opposition to the measure, while the Montana Hospital Association funded much of its support). But voters in Montana did not approve the measure in the November 2018 election.

The ballot initiative called for raising the tax on a pack of cigarettes by $2 (to $3.70) and raising taxes by 33 percent for other tobacco products, like e-cigarettes. It would have compelled 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 7 percent of the cost; that will grow to 10 percent in 2020 and beyond. The tobacco tax was expected to generate $74 million per year by 2023, but Montana lawmakers estimated 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 had to come up with additional revenue.

Instead, lawmakers have approved a 6-year extension of Medicaid expansion, but with a work requirement

Since the ballot initiative failed, the issue of continued Medicaid expansion was in lawmakers’ hands during the 2019 legislative session, and a compromise had to be reached in order to extend Medicaid expansion past the end of June. H.B.425 was introduced in February, and called for the current Medicaid expansion program to be extended. That legislation didn’t go anywhere, but H.B.658, which calls for a six-year extension of Medicaid expansion along with a Medicaid work requirement, passed and was signed into law by Gov. Steve Bullock in May 2019. H.B.658 was introduced by Rep. Ed Buttrey, a Republican representing Great Falls who also sponsored the 2015 legislation that expanded Medicaid in Montana.

Since H.B.658 calls for a new Medicaid work requirement for non-exempt adults enrolled in expanded Medicaid, the state must obtain federal approval in order to move forward with implementation. The Trump Administration has been eager to approve similar proposals in other states (although their legal standing is uncertain, as a federal judge has overturned Medicaid work requirements in Kentucky and Arkansas and an appeal is underway). Under the terms of H.B.658:

  • Adults ages 19-55 who are enrolled in expanded Medicaid would have to work or participate in other community engagement activities for at least 80 hours each month.
  • There are numerous exemptions available (in most cases, due to the fact that most Medicaid expansion enrollees are already working), and only about 8,000 people out of 96,000 Medicaid expansion enrollees are expected to be newly subject to the work requirement. Buttrey has said that the number of people subject to the work requirement could end up being quite a bit different from the estimate, citing the fact that enrollment in expanded Medicaid ended up being far higher than initial projections. [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, but enrollment had exceeded 96,000 by 2019.]The fiscal analysis of an earlier version of H.B.658 indicated that as many as 50,000 people could lose coverage as a result of the work requirement, reporting requirements, and increased premiums. Additional exemptions were added after that, however, making the expected coverage losses much lower. But it still has to be noted that thousands of people are expected to lose their coverage under the new rules (as we’ve already seen happen in Arkansas), and will likely join the ranks of the uninsured — resulting in additional uncompensated care costs in the state and poorer health outcomes for the individuals who lose their coverage.
  • Enrollees who aren’t in compliance with the work requirement will have 180 days to come into compliance. After that, their coverage would be suspended, but they would have an opportunity to re-enroll after 180 days. And if they can demonstrate that they’ve been in compliance with the work requirement for at least 30 days, they’d have an opportunity to re-enroll before the 180 waiting period is up. although they would then be subject to “heightened monitoring” for the remainder of the 180 days.
  • If more than 5 percent of Medicaid expansion enrollees lose their coverage under the work requirement rules, it would trigger an audit. If the audit determines the more than 10 percent of the people in the audit sample lost their coverage erroneously, coverage suspensions under the work requirement would cease until the end of the next legislative session, giving lawmakers a chance to revisit the issue (but as the Center on Budget and Policy Priorities notes, people who are working but weren’t able to accurately document their work hours — and thus had their coverage suspended — might also have trouble proving their work status during the audit process).
  • Under the terms of the Medicaid expansion waiver that Montana obtained in 2015, the state already charges Medicaid premiums for the expansion population with incomes between 50 and 138 percent of the poverty level. The premiums are currently 2 percent of the enrollee’s income, but H.B.658 increases that by half a percent per year until it reaches 4 percent (people who are exempt from the work requirement would not be subject to the premium increases).
  • The legislation increases some existing fees and adds some new ones (on hospitals, outpatient providers, and insurers) in order to cover the state’s portion of the cost of Medicaid expansion. It also creates an employer grant program intended to make it easier for employers to hire Medicaid expansion enrollees, with a focus on new employment — particularly jobs that include health coverage benefits or pay well enough to allow the employee to transition to being able to purchase their own health insurance coverage.

The state has until August to submit an 1115 waiver proposal to CMS, seeking federal approval for the work requirement. Assuming that’s granted — and that legal challenges to the work requirements concept don’t block implementation — Montana’s work requirement is scheduled to take effect in January 2019.

Montana’s Medicaid expansion waiver allows for Medicaid premiums, but H.B.658 will increase them

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 Medicaid expansion legislation that was enacted in 2015 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.

Montana’s initial Medicaid expansion waiver calls for enrollees with income above 50 percent of the poverty level (that’s $6,245 for a single individual in 2019) to pay 2 percent of their income in premiums, which the state says average about $26 per month (Montana is one of seven states that have waivers allowing them to charge premiums for Medicaid enrollees). 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 noted above, H.B.658 calls for premiums to gradually increase to 4 percent of income, although they would stay at 2 percent for the first two years a person is enrolled in the program, and premium increases would not apply to people who are exempt from the Medicaid work requirement. But at 4 percent of income, premiums for Montana’s Medicaid would be by far the highest in the country. And it’s noteworthy that in states that haven’t expanded Medicaid, people with income between 100 and 133 percent of the poverty level (all of whom are eligible for Medicaid in states like Montana that have expanded Medicaid) can buy subsidized plans in the exchange with premiums that are just over 2 percent of their income for a silver plan. At that income level, a silver plan would include significant cost-sharing reductions, although Medicaid out-of-pocket limits would still be lower.

In 2016 and 2017, Medicaid expansion enrollees in Montana paid a total of $6.7 million in premiums. According to a University of Montana analysis, enrollee premiums cover about 1 percent of the cost of Medicaid expansion (the federal government covers the vast majority of the cost, amounting to 93 percent in 2019 and 90 percent in future years).

By June 2016, 379 people with income above the poverty level had been dis-enrolled for failing to pay premiums. In 2017, there were 2,884 people who lost their Medicaid coverage in Montana due to failure to pay premiums. Montana Medicaid enrollees who are dis-enrolled as a result of non-payment of premiums can re-enroll after they pay their past-due premiums, or at the end of the calendar quarter when their debt is assessed by the state.

Blue Cross Blue Shield managed expansion program in 2016 and 2017, but Montana Medicaid took it over in 2018

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.

BCBS of Montana provided care coordination for approximately 19,000 Medicaid expansion enrollees, but the state ended that contract that the end of 2017 in an effort to save money. Montana Medicaid is now managing the program themselves, although they do not get as involved with the care coordination as BCBSMT did.

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 you can be enrolled in both Medicaid and Medicare – and why it matters.

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 programs 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 February 2019, after the expanded guidelines had been in place for three years, total Medicaid/CHIP enrollment in Montana had grown to 278,217 people — an 87 percent increase since the end of 2013.

Medicaid in Montana: 2019 Report from DPHHS

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.

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