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Montana and the ACA’s Medicaid expansion

Work requirement was not approved; Medicaid expansion premiums must end after 2022. But CMS is allowing Montana to end its 12-month continuous coverage rule for Medicaid expansion enrollees

ACA’s Medicaid eligibility expansion in Montana

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.

Federal poverty level calculator

Under the expanded guidelines, Medicaid is available for all adults with incomes up to 138% of poverty. (Medicaid and CHIP eligibility limits for children and pregnant women are higher, and remained unchanged by the waiver approval.) Montana’s Medicaid expansion waiver (which includes premiums for enrollees with income above 50% of the poverty level, although those must terminate after the end of 2022) 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 extended Medicaid expansion in the state for another six years, albeit with a work requirement. The state submitted the work requirement proposal to CMS in August 2019. But the approval process was hampered by the COVID pandemic, and the work requirement proposal had not been approved by the time President Biden took office.

Soon thereafter, the new administration reached out to states with approved or pending Medicaid work requirement waivers. Montana officials were notified of the administration’s plan to review work requirement proposals and determine whether they further the mission of the Medicaid program. And in 2021, the administration officially rescinded previously approved Medicaid work requirement waivers in all states where they had been approved. Montana’s work requirement proposal still appears as a pending application in the state’s Medicaid expansion waiver, but it will not be approved under the Biden administration.

Total Medicaid/CHIP enrollment in Montana grew by 106% from late 2013 to March 2022, an increase driven mainly by Medicaid expansion and the COVID pandemic (including the pandemic-related pause on Medicaid eligibility redeterminations). After increasing steadily in 2016 and 2017, enrollment in expanded Medicaid had been mostly steady in 2018 and early 2019, although enrollment declined in late 2019, and had dropped to about 80,000 people by early 2020.

But as was the case nationwide, Medicaid/CHIP enrollment has climbed sharply since the pandemic began. By April 2022, there were more than 115,000 people enrolled in expanded Medicaid in Montana.

And Montana’s Medicaid expansion has allowed hospitals, including those in rural areas, to remain solvent. As a result of Medicaid expansion in the state, Montana hospitals have seen a 49% reduction in uncompensated care.

Rejected ballot initiative would have generated funds to continue Medicaid expansion past 2019

Montana’s initial Medicaid expansion waiver was effective for five years, from 2016 through 2020. However, it was 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% 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 started to shoulder a small portion of the cost as of 2017, reaching 10% by 2020 (it will remain at that 90/10 split in future years). The tobacco tax was expected to generate $74 million per year by 2023, but the expectation was that the state would also have had to come up with additional revenue.

Instead, lawmakers 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 during the 2019 session and simply called for the existing Medicaid expansion program to be extended. That legislation didn’t go anywhere, but H.B.658, which called for a six-year extension of Medicaid expansion along with a Medicaid work requirement, passed and was signed into law by former 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.

Work requirement won’t be approved by the Biden administration; two one-year extensions of the existing Medicaid expansion program have been granted (in late 2020 and late 2021)

Since H.B.658 called for a new Medicaid work requirement for non-exempt adults enrolled in expanded Medicaid, the state had to obtain federal approval in order to move forward with implementation. The Trump administration had been eager to approve similar proposals in other states, but their legal standing was uncertain as of late 2019 and early 2020.

Montana officials submitted their proposed 1115 waiver to CMS in August 2019, seeking federal approval for the work requirement and various other changes, detailed below. The state had planned to implement the work requirement as of January 2020, and between 4% and 12% of the Medicaid expansion population was expected to lose coverage due to non-compliance with the work requirement and/or work reporting requirements.

This was a very tight timeline, as work requirement approvals in other states had taken many months or even more than a year. So it was not surprising when state officials clarified in November 2019 that the work requirement was not going to take effect in January 2020, and could be delayed up to a year.

The work requirement still had not been approved by December 2020, so the Trump administration granted a one-year extension of Montana’s existing Medicaid expansion program. The Biden administration granted another one-year extension in 2021, which runs through the end of 2022.

The Biden administration notified states in early 2021 that approved and pending Medicaid work requirements would be reconsidered to determine whether they fit the objectives of the Medicaid program. By 2021, Medicaid work requirement approvals had been revoked by CMS in every state where they had previously been approved, and Montana’s will not be approved by the Biden administration.

For reference, this is what Montana was proposing, as called for in 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. The state had initially projected that only about 8,000 people out of 96,000 Medicaid expansion enrollees would be newly subject to the work requirement, although a later estimate put the number as high as 26,000 people. (Buttrey had 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. 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 were expected to lose their coverage under the new rules (as we’ve already seen happen in Arkansas), and would likely have joined 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 would 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 could demonstrate that they had 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 was up — although they would then be subject to “heightened monitoring” for the remainder of the 180 days.
  • If more than 5% of Medicaid expansion enrollees lost their coverage under the work requirement rules, it would trigger an audit. If the audit determined the more than 10% 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% of the poverty level, with premiums equal to 2% of the enrollee’s income. H.B.658 called for increasing that by half a percent per year until it reached 4% (people exempt from the work requirement would not be subject to the premium increases). Montana submitted another Medicaid expansion 1115 waiver amendment in September 2021, seeking approval for the premium increase. But CMS rejected it, and also notified the state that the existing Medicaid premiums cannot be charged after the end of 2022.
  • The legislation increased some existing fees and added 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 created 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.

Montana’s Medicaid expansion waiver allows for Medicaid premiums; H.B.658 would have increased them, but CMS rejected that proposal and is ending the premiums altogether after 2022

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 (S.B.405) 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.”

S.B.405 called for newly-eligible enrollees to pay 2% 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 in 2015; that is clarified on page 26 of the waiver proposal, and was brought up as a concern by Montana Representative Art Wittich. Work and job training requirements were generally not approved by the Obama administration 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 its 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 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% of the poverty level (that’s $6,795 for a single individual in 2022) to pay 2% 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, although only three — including Montana — are charging premiums during the COVID pandemic). 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.

(Note that during the COVID public health emergency, states cannot disenroll anyone from Medicaid, as one of the conditions for receiving additional federal Medicaid funding; the COVID public health emergency has been ongoing since early 2020, and has been extended through at least mid-October 2022. So Montana enrollees who don’t pay premiums are not being disenrolled during the COVID pandemic.)

As noted above, H.B.658, enacted in 2019, calls for premiums to gradually increase to 4% of income, although they would stay at 2% 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% 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% of the poverty level (all of whom are eligible for Medicaid in states like Montana that have expanded Medicaid) can obtain premium-free benchmark plans in the exchange (this is an improvement for 2021 and 2022 under the American Rescue Plan; prior to that legislation, people at that income level would have to pay roughly 2% of their income for the benchmark 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.

The increased premium proposal was part of the additional Medicaid waiver amendment that Montana submitted in September 2021. But it was not approved by the Biden administration. Instead, the Biden administration notified Montana officials that they would have to end the Medicaid expansion premiums altogether after the end of 2022.

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% of the cost of Medicaid expansion (the federal government covers 90% of the cost; the state pays the rest).

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 could 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. (Again, note that Medicaid enrollees have not been disenrolled for any reason other than moving out of state, since the start of the COVID pandemic; Montana’s premiums have not been used to disenroll anyone since the start of the pandemic.)

CMS approved elimination of 12-month eligibility guarantee for Medicaid expansion enrollees

As part of the Medicaid expansion waiver that CMS approved for Montana in 2017, the state would grant 12 months of eligibility to anyone found eligible for Medicaid expansion. If their income or circumstances were to change during that 12 months, they would not lose their coverage.

But the state subsequently enacted a budget that called for the elimination of that rule, and submitted the rule change as part of the waiver amendment proposal that was submitted to the federal government in September 2021. In December 2021, CMS approved that aspect of the state’s waiver amendment.

Until the end of the COVID public health emergency, Montana (and every other state) cannot disenroll anyone from Medicaid for any reason, unless they move out of state or request a disenrollment. But once the public health emergency eventually ends, Montana will be able to apply the new rules to new Medicaid expansion enrollees (those who are already enrolled will continue to have their existing terms of service, which include 12 months of eligibility).

That means people whose circumstances change after enrolling in expanded Medicaid may find that they’re no longer eligible for Medicaid and will have to switch to different insurance coverage.

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 2015 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.

Montana has accepted federal Medicaid expansion

  • 306,909 – Number of Montanans covered by Medicaid/CHIP as of March 2022
  • 157,935 – Increase in the number of Montanans covered by Medicaid/CHIP fall 2013 to May 2021
  • 52% – Reduction in the uninsured rate from 2010 to 2019
  • 106% – Increase in total Medicaid/CHIP enrollment in Montana since late 2013

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 under age 65 with household income up to 138% of poverty
  • Children are eligible for Medicaid if their household incomes are up to 143% of poverty. Above that level, they are eligible for CHIP if their household incomes do not exceed 261% of poverty.
  • Cancer screening services are available to residents with household incomes up to 200% of poverty.

How does Medicaid provide financial assistance to Medicare beneficiaries in Montana?

Many Medicare beneficiaries receive Medicaid financial assistance that can help them with Medicare premiums, lower prescription drug costs, and pays for expenses not covered by Medicare – including long-term care.

Our guide to financial assistance for Medicare enrollees in Montana includes overviews of these programs, including Medicaid nursing home benefits, Extra Help, and eligibility guidelines for assistance.

How do I apply for Medicaid in Montana?

If you are under 65 and don’t have Medicare:

  • You can apply at at any time – Medicaid enrollment is available year-round.
  • You can also apply online at anytime during the year.
  • You can also apply over the phone with by calling 1-800-318-2596.
  • You can apply in-person at any of Montana’s Offices of Public Assistance.

If you’re 65 or older or have Medicare, visit this website to apply for Medicaid benefits.

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% 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 early 2022, after the expanded guidelines had been in place for six years and the COVID pandemic had been ongoing for two years, total Medicaid/CHIP enrollment in Montana had grown to 306,909 people — a 106% increase since the end of 2013.

Medicaid in Montana: 2021 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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Eligibility: Children are eligible for Medicaid with household income up to 143% of the federal poverty level (FPL), and CHIP with household income up to 261% of FPL. Pregnant women are eligible for Medicaid with household income up to 157% of FPL. Other adults are eligible for Medicaid with household income up to 138% of FPL (enrollment commenced November 2, 2015, for coverage effective January 1, 2016).

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