Outlook 2019: Bullock Lays Out Priorities for Coming Session

Democratic governor says Medicaid expansion, preschool and infrastructure rank high on his wish list

By Tristan Scott
Gov. Steve Bullock speaks in the Montana State Capitol. Beacon File Photo

As state lawmakers prepare to convene for the 66th session of the Montana Legislature, slated to begin Jan. 7, it’s widely agreed that crafting a bill to continue Medicaid expansion will dominate the 90-day term, a prediction that, coupled with Democratic Gov. Steve Bullock’s spending and tax proposals, sets the stage for another budget battle in 2019.

Republicans will control the Legislature again when it convenes, and GOP leaders are already pushing back on the governor’s proposals advocating for the Medicaid expansion program, among his other priorities, like preschool and new taxes.

Everyone agrees that Medicaid expansion will be the crux of the session, but even conservative Republican lawmakers agree that it will pass with a narrow squeak, though nearly all of them said it would require tweaks and reform.

Most of the Republican majority in both houses of the Legislature voted against Medicaid expansion in 2015, including those who are now the GOP’s top leaders at the 2019 Legislature.

In the Flathead, GOP lawmakers described Medicaid expansion as the most likely issue to overshadow the session, with Sen. Mark Blasdel, R-Kalispell, who is Senate President Pro-Tempore, calling it the “big elephant in the room.”

Medicaid expansion in Montana launched in January 2016 with the approval of a coalition of Democrats and moderate Republicans, and some counts estimate that more than 96,000 Montana residents are now enrolled.

However, the program is scheduled to end in July unless the Legislature renews it.

The program would cost Montana an additional $126 million over 2020 and 2021 as the state takes on a greater share of the costs now covered by the federal government, along with the increasing cost of administering the program, according to a report by the Legislative Fiscal Division.

Those new costs would be partially offset by $11 million in premiums collected and $57 million saved by avoiding enrollments in traditional Medicaid, for which the state pays a higher share of the costs compared to the expansion program, according to the report.

The net cost to the state would be $26 million in 2020 and $33 million in 2021.

While the state’s finances are still forecast to be in the black even with the increased expansion costs, the report states, money from tax collections is expected to rise to $2.6 billion by 2021, giving the state a cushion against the spending levels set in current law, including Medicaid expansion.

According to Blasdel, continuing Medicaid expansion in its current form will put a larger strain on the state budget, drawing away from funding for senior and disability services, K-12 and higher education, infrastructure, and correction, compensation for which will likely come from tax increases, which he opposes.

GOP lawmakers also say voters rejected in November a ballot initiative that called for increasing tobacco taxes to help pay for Medicaid expansion, with some pointing to the initiative’s failure as evidence of a diminished appetite for Medicaid expansion.

But Bullock, preparing for his final Legislature, disagrees, and in a recent interview with the Beacon laid out his plan for continuing Medicaid, as well as his other top priorities for 2019, which he’s adamant he’ll sign into law during his final term.

“I don’t take the failure Initiative 185 as a sign that Montanans oppose Medicaid expansion,” Bullock said of the initiative, which big tobacco companies spent millions of dollars to oppose.

His two-year spending plan also includes state-funded preschool, funds to freeze college tuition and other student aid and resources, as well as a stout infrastructure proposal. He’s insisting on a $300 million year-end cushion, which he says is possible given the nearly $160 million in new taxes he’s proposing for the next biennium.

“We ought to walk out of the legislative session not in a situation where we get hit in the face and have to cut services, but where we walk out with $300 million in the bank to ensure we can weather those cuts,” Bullock said.

Bullock said he’s made inroads with legislators on both sides of the aisle regarding the future of Medicaid expansion, but he’s not inclined to agree to requirements proposed by GOP lawmakers that he says will cost more money to administer, and would serve only to kick people off the program.

“Economic studies in other states have shown that it actually costs more to implement the work requirements and all the monitoring they require than it does to provide the benefits,” he said.

Bullock said 70 percent of Montanans covered by Medicaid expansion are already working.

He also said the program essentially serves as a subsidy for many businesses in the state, by providing government-funded health coverage to those who aren’t covered by their employer. Overall, the expansion has been a huge benefit to the state, Bullock said.

“Montanans have seen great successes with Medicaid, dropping our uninsured rate from 20 percent down to 7 percent, the $300 million of new personal income that’s been brought into our state, and we haven’t lost one rural hospital,” he said.

Still, it’s unlikely that Bullock’s vision for Medicaid expansion will emerge completely intact as GOP leaders vow to make changes.

Scott Sales, the GOP Senate president from Bozeman, said adding personal accountability to Medicaid enrollees will play a significant role in the upcoming debate over its future, including discussions about adding “sideboards” like work requirements for able-bodied adults, and asset testing to provide critical services to the citizens who need it most — exactly the kind of requirements Bullock says will only waste money.

Sales said GOP lawmakers are still grappling with how to interpret what the failure of Initiative 185 says about constituents’ attitudes toward continuing the program.

“There’s a big debate even in our caucus about what the failure of I-185 meant,” Sales said. “For some it means that voters came out in opposition to Medicaid expansion, but for a lot of others it’s about passing expansion with some reforms in place. I think a lot of those concepts will come forward in the next few months. But this is one issue that’s not going to be solved in the first 20 to 30 days.”