Montana Legislature set to extend Medicaid amid federal uncertainty

Despite concerns about what Congress and the Trump administration might have planned for Medicaid, Montana’s Republican-led Legislature and GOP governor appear ready to keep the state’s Medicaid expansion program in place beyond its scheduled end date this summer.

State lawmakers don’t have the luxury of waiting until the federal picture sharpens. They must decide before the session ends in early May whether to lift a June 30 sunset date for the expansion program, which covers about 76,000 adults.

However, the likelihood that significant changes lie ahead for the joint federal-state Medicaid program has spurred discussion of whether legislators should — or can — prepare for what may be coming. That’s the challenge for lawmakers this session, said Republican state Rep. Jane Gillette during a recent meeting of the budget subcommittee she chairs that works on the Medicaid budget.

“What are the different options we have for bracing ourselves for that?” Gillette said.

The U.S. House is working on a budget bill to reflect President Donald Trump’s priorities, including allocating up to $4.5 trillion to extend tax cuts that would otherwise expire.

A plan passed by the House Budget Committee on Feb. 13 calls for $880 billion in cuts over the next 10 years for the committee that oversees, among other things, Medicaid spending. Ideas reportedly under discussion include federal work requirements for some Medicaid enrollees and a decrease in the share of costs the federal government pays for people covered by the expansion program.

Some of the proposals would shift significant costs to the states, noted Robin Rudowitz, a vice president and the director of the Program on Medicaid and the Uninsured at KFF, a health information nonprofit that includes KFF Health News. If that happens, states will need to raise revenue or cut spending elsewhere to continue the same level of Medicaid coverage, she said.

There are “no easy answers or options for states in these scenarios,” she said.

Some states are debating how to prepare for possible federal changes. The South Dakota Legislature is considering a bill that would ask voters whether to continue Medicaid expansion if the federal share drops. A bill to repeal Idaho’s expansion program outright has been introduced but not heard, while another making it contingent on federal approval of several limitations passed the state House on Feb. 19. Montana and eight other states have trigger laws that could end their expansion programs if the federal contribution rate drops.

The GOP-controlled Montana House of Representatives easily passed a bill to make the Medicaid expansion program permanent on Feb. 10 by a 63-37 vote. Then on Feb. 20, House Bill 245 passed the first of two votes required for Senate approval. Gov. Greg Gianforte has not publicly said whether he would sign the bill, but he previously said he believes the expansion program should continue if strong work requirements are in place.

In late January, the budget subcommittee that Gillette chairs was reviewing Medicaid expansion’s financial implications when talk quickly turned to the possible federal changes, particularly a drop in the federal matching rate.

Republican state Sen. Carl Glimm (R-Kila) noted that observers have called a lower federal matching rate “pretty low-hanging fruit.” The change would require congressional action, though, and members noted that could take time.

The federal government pays 90% of the health care costs of expansion enrollees. That group is made up of adults ages 19 to 64 without disabilities and who have annual incomes at or below 138% of the federal poverty level, or $21,597 for an individual.

Until the federal Affordable Care Act allowed states to extend Medicaid to this group, the program was generally limited to low-income children, pregnant women, and adults who are blind, disabled, or at least 65. The federal match for those groups in Montana will be about 62% in the next state fiscal year, which begins in July.

The state spent nearly $1 billion on Medicaid expansion in 2024, with its share of the costs totaling just under $100 million. Budget committee staff said a 10% reduction in the federal share would add roughly $100 million in state costs. If the state’s share goes from 10% to the regular state match of 38%, the state would pay about $280 million more a year for expansion.

Subcommittee member Russ Tempel, a Republican senator, noted that the federal share changed in the past due to unexpected events, such as COVID-19.

“Something’s going to happen that’s unpredictable,” he said. “It’s happened before, and it’s going to happen again, so we’re kind of a little bit shooting in the dark.”