News & Features

GOP Health Care Bill Shifts Millions in Costs to Montana

State would have to pay an extra $126 million a year to continue its Medicaid expansion program

HELENA — Montana would have to spend an extra $126 million a year to continue its Medicaid expansion program under proposed legislation to replace the federal Affordable Care Act, according to estimates by Gov. Steve Bullock’s budget office provided to The Associated Press in response to a public records request.

In addition, the budget office estimates that 34,000 people now covered by Medicaid would lose their coverage over the next decade.

Others who signed up for private health insurance through the Affordable Care Act would see costs increase by thousands of dollars, the budget office said.

However, state officials have not analyzed how many non-Medicaid beneficiaries who are covered through the Affordable Care Act would lose coverage because of the proposed elimination of penalties for individuals who are uninsured and the replacement of income-based tax credits with lower age-based credits.

“Our office doesn’t have the resources with our budget to dive into the plan,” said Kyle Schmauch, Insurance and Securities Commissioner Matthew Rosendale’s spokesman. “We don’t have a staff or a team here that does that kind of analysis in real time.”

A report by the Congressional Budget Office estimated that 14 million people nationwide would lose coverage under the Republican bill next year, and 24 million by 2026.

Among the changes in the proposed Republican health overhaul, federal payments would be cut to states that expanded their Medicaid program to people who earn up to 138 percent of the federal poverty level, or $24,600 for a family of four.

That enhanced federal match for Medicaid expansion enrollees would be cut from 90 percent to about 65.5 percent, which is Montana’s regular Medicaid federal match, in 2020. The state would have to make up the difference.

That would cost $251.9 million over the state’s two-year budget cycle to maintain the same level of health coverage for people who enrolled in the expansion program, according to Bullock budget director Dan Villa.

“That would be a 10 percent increase in expenditures from our current budget,” Villa said.

The federal legislation would allow the state to continue to receive the same 90 percent federal match for people who enrolled in the expansion program before 2020.

However, the governor’s office estimated that nearly everybody in the program would cycle out over two years and be replaced with new enrollees as the former enrollees get jobs or additional income that puts them over the 138 percent federal poverty limit and disqualifies them from the program.

Those who return to the program would no longer qualify for the 90 percent match, which would effectively end.

“This is a population whose income fluctuates frequently,” said Bullock spokeswoman Ronja Abel.

Senate Finance and Claims Chairman Llew Jones, R-Conrad, said the federal legislation is not in its final form, and any estimates about its cost to the state are premature. He suggested that the Democratic governor released his estimates to The Associated Press to score political points by portraying an unlikely doomsday scenario.

“I guess there could be a worst-case example where that would be true, in which case then the Help Act as it was written probably would need to back way off,” Jones said, referring to the Montana Medicaid expansion bill’s name. But, he added, “A bill is sausage making and that bill is so far from coming out that we would only be speculating.”

The 34,000 people who would lose coverage would be from the entire Medicaid program, not just the expansion enrollees. A further breakdown of those numbers was not immediately available from the governor’s office.

A study by the Center for American Progress estimated that Montana residents would face the 10th highest cost increases in the nation under the federal legislation, compared to the Affordable Care Act.

Particularly hard hit would be people between 55 and 64 years of age, according to the study. Those individuals would pay $8,150 more in costs — a combination of premiums, tax credit adjustments, co-pays and deductibles — than what they pay under the Affordable Care Act, if the legislation took effect this year.

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