Reports underscore Medicaid’s impacts on state’s health, economy

In an effort to help Montanans better understand the state’s Medicaid program, which currently covers 265,000 of the state’s most vulnerable children and adults, the Montana Healthcare Foundation recently released two reports detailing how the program benefits the state’s health and economy.

One of the reports, produced by Manatt Health and commissioned by the Montana Healthcare Foundation, highlights the program’s beneficiaries and costs and its impacts on the health system and health outcomes of individuals. The other report, conducted by Bryce Ward of ABMJ Consulting, focuses on the economic benefits of Medicaid expansion, including how it brings $650 million into the economy annually.

Montana Medicaid and the Children’s Health Insurance Plan, known as CHIP, are collectively referred to as “Medicaid” within the Manatt Health report. The Healthy Montana Kids Program, which supports CHIP, is the largest provider of health care for children in the state, while Medicaid serves a wide array of other Montanans based on their medical needs.

The report says Medicaid currently provides 25% of Montanans access to health services. Roughly two-thirds of those individuals reside in rural communities and nearly 50,000 are American Indians. Seniors and individuals with disabilities account for 15% of the program’s population, but contribute to 40% of overall expenditures.

Many of these individuals have used Medicaid to prevent serious illnesses, the report shows. For example, in 2019 the program supported nearly 70,000 wellness exams, 65,000 vaccinations, thousands of cancer screenings and nearly 140,000 dental appointments.

"Montana's Medicaid program covers roughly one-quarter of Montanans. This report sheds light on the role it plays in improving health and strengthening health care and mental-health services for people throughout our state, particularly in rural Montana,” Montana Healthcare Foundation CEO Dr. Aaron Wernham said in a prepared statement.

The document also touches on how Medicaid has also supported many Montana residents throughout the COVID-19 pandemic. Among other findings, Medicaid-covered behavioral telehealth service visits increased by over 1,400% through August 2020. The program waived in-person service delivery requirements for many physical and behavioral health services since the novel coronavirus emerged in the state, including in Flathead County, where local health-care providers have said they are using telehealth services now more than ever.

“Montana’s safety net, including Medicaid, has never been more important as a resource to support families that have lost income and hospitals and providers working on the frontlines of the pandemic,” Wernham said.

MUCH OF the content in the two reports focuses on Medicaid expansion.

More than five years ago, the HELP Act expanded Medicaid to cover 90,000 Montanans with incomes at or below 138% of the federal poverty level.

Expansion in the state was slated to sunset in June 2019. But after voters rejected a 2018 initiative that would have permanently funded a portion of expansion through a tobacco tax, Montana enacted legislation extending Medicaid expansion for an additional six years.

By the time expanded coverage first became available in January 2016, nearly 25,000 Montanans had already signed up for the program — a number that would grow to nearly 60,000 by the end of that year, according to state health department data. Today, nearly 93,000 individuals are enrolled statewide, approximately 13,000 of which have joined since March 2020, when COVID-19 was detected in Montana.

To put that figure into a local context, nearly 9,000 Flathead County residents currently are enrolled in expansion, or nearly 9% of the population, based on U.S. Census Bureau estimates. Additionally, approximately 11.2% of Lincoln County is enrolled, 11.5% of Sanders County, nearly 16% of Lake County and more than 19% of Glacier County.

All told, almost 19,000 persons across those five counties are enrolled.

ACCORDING TO the Manatt Health report, expansion also generated state budget savings that exceeded $28 million in fiscal year 2019 by providing higher match rates for select Medicaid populations and by replacing existing state spending with new federal dollars. Overall, expansion infuses over $650 million in new federal spending in Montana annually, which, in turn, stimulates economic activity.

The report states, “with the implementation of expansion, uncompensated care costs for hospitals in Montana halved.”

The report from ABMJ Consulting underscores similar fiscal findings. For example, in addition to the program adding millions in federal spending, expansion supports 6,000 new jobs and $400 million in personal income.

Brenda Solorzano, CEO of the Headwaters Foundation, which released the report in partnership with Montana Healthcare Foundation, said “one in ten Montanans can now access care, no rural hospital has closed in Montana since the Medicaid expansion, and million of additional dollars are flowing through the Montana economy because of the expansion.”

Medicaid is a joint federal-state program that is managed locally by DPHHS and federally by the CMS. Montana receives approximately two federal dollars for every state dollar it spends on Medicaid enrollees' medical care and health-care providers statewide. Reimbursement rates are higher for “expansion” enrollees and for Indian Health Services and Tribal Services, among other populations and services.

The two highest potential costs of expanding Medicaid, both of which are frequently discussed by state leaders, are job loss — spurred on by people who would otherwise participate in the labor force, but drop out, for example — and fiscal cost.

But evidence from the report suggests these costs to the overall economy are minimal.

The report states Montana’s labor force participation increased by more than one percentage point after expansion. Additionally, Medicaid expansion leads to reductions in state spending on traditional Medicaid and other health programs for low-income Montanans, savings that are large enough to offset much of the state’s costs associated with expansion.

Overall, when the revenue associated with increased economic activity is added to the savings by Medicaid expansion, the “net fiscal benefit” to the state is positive, covering between 110% and 159% of the state’s share of the cost of the program, the report states.

“Medicaid expansion continues to pay for itself through a combination of savings and increased state revenues,” Wernham said.

Both of the reports, along with other studies related to Medicaid and Medicaid expansion, can be found online at www.mthcf.org

Reporter Kianna Gardner can be reached at 758-4407 or kgardner@dailyinterlake.com