More state budget cuts could be on the horizon: How much more can our communities take?

The Montana Budget and Policy Center staff spent their weekend pouring over the 10 percent reduction plans submitted by each state agency to the governor’s office. These plans, totaling over 220 pages, provide a glimpse at how painful these cuts could be for services for Montana families and support for schools, local law enforcement, and counties.

It’s important to note that these proposed 10% reduction plans are coming on top of $218 million in cuts that happened during the legislative session and this summer.

As we’ve discussed in previous blogs, according to the governor’s budget office, the state now faces a $227 million shortfall. In order to restore the ending fund balance back to where it needs to be, the governor and legislature can make further cuts and/or find new revenue. While the governor has some authority to make cuts on his own, the law limits him to cutting no more than 10% in each agency program. In order to reach the $227 million, the governor would have to take the full 10% of cuts in nearly every program.

In other words, if the governor and legislature do not come together to find additional revenue, the governor may be forced to address the budget crisis entirely through cuts and would have to accept nearly everything contained in the agency reduction plans. In that scenario, the Department of Health and Human Services (DPHHS) would experience the largest cut. According to the department’s reduction plan, the general fund cuts total $105 million and would also result in the loss of $135 million in federal funds, for a total loss of $240 million.

Potential cuts to DPHHS include:

  • Eliminate health case management for foster children, provided by Missoula and Cascade County Health Departments and Riverstone Health (Billings).
  • Eliminate supplemental payment to foster parents caring for infants and toddlers to help defray costs for diapers.
  • Cut orientation and mobility skill instruction for 300 children with low vision or blindness.
  • Cut grants for child care providers that help improve quality care.
  • Cut over $2 million in funding for non-profit organizations in Billings, Missoula, and Helena that provide housing and support for teenage mothers.
  • Eliminate partnership with Children Advocacy Centers that provide multidisciplinary evaluation of children victims of violence. This work and cost would be shifted back to local law enforcement agencies.
  • Eliminate funding for mentoring of foster children through eight Big Brothers Big Sisters organizations across the state.
  • Cut funding to domestic violence shelters across the state.
  • Cut $400,000 provided to tribes to assist with foster care placement of tribal children currently in their care.
  • Cut an additional $48 million in targeted case management for individuals with disabilities and those experiencing mental health and substance use disorders (this is in addition to cuts made earlier this year).
  • Eliminate funding for services for developmentally disabled and at-risk children ages 0-36 months.
  • Eliminate Medicare prescription drug benefits for over 10,000 low-income seniors.
  • Cut $6.8 million in services for home and community-based services for seniors and people with disabilities who want to stay in their home or community, likely forcing more Montanans into nursing home care.
  • Cut $8.5 million in hospice services.
  • Cut $15.5 million in personal assistant services for seniors and people with disabilities living in their own home.
  • Eliminate health insurance coverage for direct care workers who are already struggling to make ends meet.
  • Cut $23 million in reimbursement rates for hospitals providing care to Medicaid patients, including cuts to payments for Montana’s rural critical access hospitals. These cuts could mean reduced access to services in rural Montana.
  • Eliminate Medicaid’s coverage for some dental services, which could impact over 44,000 Montanans and 585 dentists providing coverage to Medicaid patients.
  • Cut $1.6 million in chemical dependency treatment.
  • Reduce grants to counties for mental health crisis intervention.
  • Close 19 offices of public assistance in rural Montana, impacting many families’ ability to access assistance and services.
  • Leave significant number of staff positions vacant through biennium (between 8% and 18% of positions in each division will be left unfilled).
  • For some remaining Department staff, mandatory furloughs that will cut hours by 7% to 12.5%.

This list is just cuts to DPHHS. Make no mistake, every program in every agency is facing cuts, but there is time to do something about it. The governor and legislators must come together to find a balanced solution to this crisis. Otherwise Montana is set to take a total of $500 million in general fund cuts in this biennium.

While some cuts may be inevitable, common sense measures to increase the tobacco tax and close tax loopholes would mitigate deeper cuts that will hurt our communities. These proposals should be part of the conversation. There are solutions to ensure that our tax system is fair, raise critical revenue, and help Montana be the state we all love to live in.

Focus on American Indian Youth During Suicide Prevention Month

September is National Suicide Prevention Month. Throughout the month, mental health advocates, prevention organizations, survivors, allies, and community members will unite to engage the general public about suicide prevention and the ways we publicly invest in suicide prevention efforts.

For almost forty years, Montana has had one of the highest suicide rates in the country. Death by suicide among non-Native populations peaks in older adulthood, whereas suicide among Native populations peaks during adolescence. In Montana, American Indian youth are almost four times more likely to die by suicide than their white counterparts.

Youth suicidal risk assessments for 2015 show that urban-residing American Indian youth consistently outscored reservation-residing American Indian youth in risk behaviors such as seriously considering, planning, and attempting suicide. In April we published a report Indian Country Suicide Prevention: A Critical investment in Our Communities, where you can find more information about American Indian suicide rates in Montana.

Montana’s staggering statistics, especially among American Indian youth, warrant a serious investment and should be a priority for the state of Montana.

In 2013, the Montana Legislature established the first suicide mortality review team of its kind in order to review every suicide death in an attempt to identify specific causes and tailor prevention efforts accordingly. Two years later, Governor Bullock developed an initiative to reduce suicide among Native American youth in Montana, securing $250,000 through the legislature.

The Montana Department of Public Health and Human Services (DPHHS) began efforts with a formal tribal consultation, which evolved into a statewide coalition meeting in order to develop a strategic plan. The Montana Native Youth Suicide Reduction Strategic Plan is the result of the coalition and Governor’s efforts in 2015, which was presented to state officials in January 2017.

During the 2017 session, several bills were proposed to confront the suicide epidemics among American Indians, veterans, Native youth and at-risk Montana communities. Ultimately, the Governor signed a bill to allocate $1 million for suicide prevention efforts through 2019.

This month is a time for us to consider how we invest in our most important resource: our fellow Montanans – and especially our youth. To get involved, check out your local newspaper for details on activities and events happening in your area.

Perspective on the State Budget

Yesterday, the governor’s office announced that the state could be facing more budgetary cuts in the coming months. Montana law requires the executive branch to ensure the state’s ending fund balance, or Montana’s rainy day fund, is kept at a certain level. With revenue levels down, the governor’s budget office has stated that the projected ending fund balance is now likely below that minimum amount.

We will be digging through more details over the coming days to examine the impacts of further cuts. First, we want to take a step back because it’s important to remember that any cuts considered now will be on top of the nearly $220 million in general fund cuts that were already taken through legislative action earlier this year.

The Governor’s Proposed Budget

In the chart below we’ve contrasted the governor’s proposed budget with the actual budget, determined through legislative actions. In advance of the session, the governor’s budget proposed a balanced approach that included cuts, as well as tax fairness measures, to bring the ending fund balance back up to $300 million. These tax fairness measures would have ensured out-of-state corporations and the super wealthy are paying their fair share and included a long-overdue increase to the tobacco tax.  The bar chart on the left shows the components of governor’s proposed budget, including the proposed cuts (in red and yellow) and proposed new revenue (in green). (Items below the black line are new spending or expenditure proposals that would lower the ending fund balance.)

Legislative Action

The bar chart on the right shows the budget crafted by the legislature. In total, through both the 2017 session and the further cuts triggered in SB 261, the legislature has cut over $220 million in general fund investments. These included cuts to health services for our most vulnerable Montanans and cuts to investments in higher education that will result in higher tuition for many Montana families. (The legislature also passed new spending proposals, also reflected in the boxes below the black line.)

While more cuts seem inevitable, we cannot continue to ask Montana families and communities to bear the brunt of these difficult times. The state had multiple opportunities to raise needed revenue to stave off these devastating cuts. Now is the time for policymakers to work together to revisit the need for more revenue.

2019 Biennium Impact to General Fund Ending Fund Balance

Report Preview: Taxes in Indian Country

Few people understand the nuances of how taxes work in Indian Country. As a result, taxation authority in Indian Country has been one of the most litigated issues between tribes, states, and local governments. Furthermore, there is much misinformation and many missed opportunities for innovative and mutually beneficial inter-governmental collaborations that respect tribal sovereignty.

MBPC is pleased to bring you a series of Policy Basics reports that break down this complex issue. This blog provides an overview of Part 1 and the taxes that individual American Indians in Montana pay. You can get all the details by reading our full report, which will be released early next week. Tribal governments and the taxes they pay and assess will be the focus of Part 2, which will be released later this fall.

Taxes and Individual Tribal Members

According to the U.S. Constitution’s supremacy clause, the Constitution, federal laws, and treaties override conflicting state laws. Additionally, a variety of U.S. Supreme Court rulings have recognized the absolute power of Congress to regulate Indian affairs and property. Altogether, this means that in most instances state and local governments cannot tax tribal members, tribal governments, or their property. However, tribal members living or working off their own reservation are subject to state and local tax laws.

In generally, individual tribal members are subject to federal income taxes. American Indians are also subject to state income taxes if they live or work off the reservation. Regardless of residence, American Indians pay into social security and Medicare, referred to as Federal Insurance Contributions Act, or FICA, taxes.

The U.S. Supreme Court has ruled that tribal members must pay state and local property taxes on their privately owned land held in fee simple status, even if their property is located on their reservation. Likewise, tribal members are also subject to all state motor vehicle taxes if they live off the reservation where they are enrolled. Regardless of residence, all tribal members in Montana must pay vehicle registration fees consisting of vehicle registration, vehicle disposal, weed control, county motor vehicle computer, and where applicable, the gross vehicle weight fees.

Tribal and state governments have each asserted their right to collect excise taxes on reservations, leading to years of costly litigation and tension. As a result, the state of Montana and the seven reservation tribal governments have negotiated a variety of revenue sharing agreements for excise taxes on alcohol, tobacco, and fuel (and in once instance oil and natural gas taxes). The goal of these agreements is to “prevent the possibility of dual taxation by governments while promoting state, local, and tribal economic development.”

Therefore, American Indians in Montana pay excise (or sales) taxes on alcohol, tobacco, and fuel that they purchase. The single exception is members of the Confederated Salish and Kootenai Tribes (CSKT), who do not pay the state tax on cigarettes they purchase on the Flathead Reservation. Because of this, the CSKT government does not receive a remittance share of this particular tax from the state; instead, they receive a limited number of tax-free cigarettes according to quotas set by Montana law. However, any sales above the quota are taxed.

Below is a visual snapshot of the taxes that individual American Indians in Montana pay. The yes-no answers paint a clear picture of what in reality is a complex statutory issue that is still being worked out between governments, Congress, and the courts.

AI taxes

 

 

 

 

 

 

 

 

It is important for policymakers and the broader public to understand how taxes work in Indian Country. This can reduce tensions and help maximize the potential for innovative and mutually beneficial inter-governmental collaborations that respect tribal sovereignty. Check out our blog early next week for Part 1 and stay tuned for more information on taxes and tribal governments, coming this fall in Part 2.

ACA Repeal: What it means for Montana

Today, we released a new comprehensive report on the importance of Medicaid for access to health services for Montana children. Roughly half (51%) of Medicaid enrollees in Montana are children, and any effort to cap and cut Medicaid will most certainly impact access to affordable health care for children in the state.

That said recent press indicates that U.S. Senate Majority Leader Mitch McConnell may pivot to again forcing a vote on a full repeal of the Affordable Care Act (ACA) without a replacement in place. So while we are excited about our new report, we suggest dusting off our report from earlier this year, about what it means for Montana to repeal ACA without a replacement. Analysis shows that roughly 142,000 more Montanans would be uninsured.

Assuming Senator McConnell uses a similar version as the bill that passed in 2015, here are the highlights of the ACA repeal’s impact on Americans’ access to health insurance:

Completely end Montana’s bipartisan Medicaid expansion as of January 1, 2020. Montana’s Medicaid expansion has provided health insurance to nearly 80,000 Montanans. There would be no phase out. There would be no statutory option for states to keep their expansions. And, as Senator Daines has called for in the past, there would be no “place to land” for the tens of thousands of working, low-income Montanans who have received affordable coverage though expansion.

Completely eliminate the ACA’s tax credits and cost sharing subsidies – with no replacement – as of January 1, 2020. As of January 31, 2017, 44,415 Montanans have accessed tax credits and cost sharing subsidies, making health insurance affordable. These folks would be left with no help starting in two years.

Immediately repeal the ACA’s high-income and corporate taxes, cutting taxes for millionaires by over $50,000 per year.

What does this mean for Americans’ access to coverage? Based on CBO’s analysis of the previously proposed repeal bill:

  • Coverage: 18 million people would lose coverage in 2018, 27 million would lose coverage by the early 2020s, and 32 million would lose coverage by 2026. These losses reflect both elimination of Medicaid expansion and the virtual collapse of the individual market, as outlined below.
  • Individual market premiums: Compared to current law, premiums would be 20-25 percent higher in the first year, 50 percent higher by the early 2020s, and would double by 2026.
  • Individual market stability: By the early 2020s, about half of the U.S. population would live in areas with no individual market insurers, rising to 75 percent by 2026. Essentially, the individual market would collapse throughout most of the country.

Senate tweaks bill, but it still spells disaster for Montanans

Yesterday, Senate GOP leaders released a discussion draft making some changes to its bill to repeal and replace the Affordable Care Act.

The big picture: none of these changes alters the overall impact of this bill on Montana. It will leave tens of thousands of Montanans without insurance, increase insurance for many more Montanans, and shift billions of dollars in costs to the state that will likely lead to deep cuts to Medicaid coverage.

Leader Mitch McConnell has indicated that the Senate will take a critical vote early next week to proceed to this bill. Here is a quick recap of some of the changes proposed to the Better Care Reconciliation Act (BCRA):

The bill makes no significant changes to the devastating cuts to Medicaid. Previous analysis that Montana would face the loss of roughly $5 billion in federal Medicaid funds likely still holds true. While the bill adds some smaller changes to the Medicaid provisions, many of the minor “fixes” are temporary and are no substitute for actual health insurance coverage. By 2036, Congress will have cut more than a third of Medicaid funds, leaving states to figure out how to provide coverage to the most vulnerable Americans, like low-income children, seniors, and people with disabilities, with significantly fewer federal dollars to do so.

Funding for opioid treatment is a drop in the bucket compared to what Medicaid coverage and Medicaid expansion is doing. The bill adds $45 billion for states to provide opioid use treatment, but this pales in comparison to what Medicaid is already doing and can continue to do for substance use disorder (SUD) treatment. Medicaid is the single largest payor for SUD treatment. Eliminating Medicaid expansion will result in tens of thousands of Montanans losing coverage, many of whom are getting preventative care, mental health treatment, and SUD treatment that they have never received before. It’s like pulling a patient out of the ICU and handing them a Band-Aid. 

Added funds for home and community-based services creates a false sense of security for states that will face growing health care costs and a growing aging population. The bill provides states with additional federal matching funds for increased payments to providers for home and community-based services (HCBS) for aging Americans, but these funds are temporary and cannot be used to expand services to additional individuals. With the deep cuts in federal Medicaid funds, it’s unclear how helpful this will be if/when the state has to cut current HCBS to cover other mandatory Medicaid costs.

The change to move costs associated with public health emergencies outside of the Medicaid per capita cap is narrow and insufficient. This change would allow states to apply to ask the feds to exempt costs associated with a public health emergency from the per capita cap amount, but it is not at all certain how this would work. The feds could deny an application, and even if it is approved, the amount is capped and would not factor in other increased health care costs within Medicaid (ex., new technology or new drugs).

The “Cruz amendment” makes this bill even worse, and sicker and older Montanans won’t be able afford insurance. The bill would allow a state to offer pared-down plans, as long as the state provides one insurance plan that complies with current Affordable Care Act requirements. This has the effect of bifurcating our insured population into two: those who are older or sicker, who need comprehensive coverage, and those who are younger or healthier (at least healthy right now), who will choose less comprehensive coverage. By siphoning off younger individuals, those who are older or sicker and need good insurance will be forced into a plan that is very expensive (and in many cases, unaffordable). This will be particularly the case for middle-income families who are also losing access to tax credits under this bill.

Now is the time to make your voices heard. The Senate needs to scrap this bill, start over, and work in a bipartisan manner to make health insurance more affordable and stabilize the health insurance marketplace.

Senator Daines continues to misconstrue the impact of Senate GOP health plan

On Wednesday night, Senator Daines held a tele-townhall to discuss the Senate GOP plan with Montanans. There are several instances where his statements don’t necessarily match up with the facts of the Senate GOP plan or its impact on Montana. We know from the Congressional Budget Office – Congress’ own nonpartisan scorekeeper – that approximately 22 million more Americans will be uninsured if the Senate bill goes into effect. An independent analysis provided for the Montana Health Care Foundation shows that Montana would lose over $5 billion in federal Medicaid funds, putting at risk coverage for thousands of low-income Montanans.

Here are some responses to statements made on Wednesday’s tele-townhall.

Eliminating Medicaid expansion will hurt many of those living in deep poverty, as well as, seniors in nursing homes and those living in their own home.

Senator Daines has indicated a couple times that he wants to protect those who Medicaid was originally designed to serve and lists “the very poor”, “the elderly under 65”, and “the disabled.” However, in many cases, those with very low incomes, including low-income seniors, were not eligible under traditional Medicaid, and it was Medicaid expansion that provided access to affordable coverage.

Previous to Medicaid expansion, an individual was generally only eligible for coverage if they had incomes below 50% of the federal poverty line and had children under the age of 18, or had a qualifying disability. Medicaid left out many low-income families who couldn’t access coverage elsewhere. During the debate on Medicaid expansion, we heard from many working parents with very low incomes who did not qualify for Medicaid but could not access affordable health insurance. We heard from many older Montanans who were living in deep poverty (and did not have young children) who did not qualify for Medicaid. Medicaid expansion has provided the life saving coverage for nearly 80,000 Montanans, many of whom Senator Daines has referenced in his examples. The Senate GOP plan will eliminate that coverage in 2021.

The Senate GOP plan will also gut traditional Medicaid, cutting over $5 billion in federal funds for Montana and likely forcing deep cuts to coverage and benefits.

Even if Senator Daines accepts the devastation due to eliminating Medicaid expansion, the additional cuts to traditional Medicaid will also hurt the very populations he has said he wants to protect. Medicaid provides health care coverage for nearly one in every three children in Montana. It provides critical health services for people with disabilities to stay in their homes and live with dignity.

The Senate GOP plan will cap federal funds provided to states to run their Medicaid programs, leaving states on their own to cover increased costs for health services. Federal oversight of Medicaid dollars guarantees that the most vulnerable Americans – like low-income children, seniors, and people with disabilities – continue to get the care they need. Under the Senate GOP proposal, spending on Medicaid would be capped or limited, and if a natural disaster occurred or public health crisis arose (like Zika or the current opioid crisis), the state would only be able to cover as many people as the annual lump sum would allow. Medicaid would no longer be a safety net program, with the federal government providing funding in response to state spending needs. Instead, states would have to come up with money themselves to cover any additional costs, turn people away, or make cuts to the people covered by the program.

Today, over 216,000 Montanans access health services through Medicaid coverage. If the Senate GOP plan becomes law, state policymakers would be left to their own devices to cut coverage for thousands of our most vulnerable neighbors.

The Senate GOP plan will leave thousands of Montanans, particularly those who are living on lower-incomes, sicker, and older, with no affordable option for coverage.

Senator Daines alleges that the Senate plan provides a “place to land” for those with lower incomes who are currently covered under Medicaid expansion, but this is far from true. Under the Senate GOP plan, these individuals would be eligible for tax credits to purchase health insurance on the Marketplace, but families would face greater costs and likely be purchasing insurance that provides less coverage.

Furthermore, many others Montanans accessing health insurance through the ACA marketplace will face greater out-of-pocket costs for worse insurance. Premium increases would be especially large for:

  • People in high-cost (read: rural) states. When looking at a comparison of how individuals in each state would fare, Montanans would, on average, see increased premiums that are the 10th highest in the country. This is because the across-the-board cuts to premium tax credits would disproportionately impact those in areas where health services and premiums are higher.
  • Older people with modest incomes. Older Americans are taking the brunt of the Senate GOP cuts, both through lower tax credits and through higher out-of-pocket costs for insurance. For example, a 60-year-old Montanan with income of $42,000 would see an increase in net premiums (after tax credits) of $5,492 to purchase the silver plan. Total reduction in tax credits is nearly $10,000.

Many of those who weren’t buying insurance in 2014 are now eligible for affordable coverage through Medicaid, but the Senate GOP plan would take away that coverage.

Senator Daines mentioned that approximately 35,000 Montanans paid the individual shared responsibility payment, and that roughly 14,000 of those are living on incomes below $25,000. It is important to note that this data is from 2014, before Montana expanded Medicaid. Prior to Medicaid expansion, those living under the poverty line (less than $12,000 for an individual, or less than $20,000 for a family of three) were stuck in the “Medicaid gap”, where they were not eligible for tax credits but also not eligible for traditional Medicaid. Montana’s bipartisan Medicaid expansion changed all that. Without access to Medicaid, lower-income families would be forced to buy insurance on the marketplace with less assistance and would be accessing less comprehensive insurance with greater out-of-pocket expense. In short, many of these Montanans would be back to where they were in 2014: with no insurance.

Montana’s bipartisan Medicaid expansion plan has saved the state millions of dollars and has provided a major lifeline for many of Montana’s rural hospitals.

 Senator Daines mentioned that the state is seeing greater enrollment in Medicaid expansion than previously projected and therefore increased costs. Without a doubt, Medicaid expansion has been a success.

Under the ACA, the federal government provides federal funding at 90% of the cost of coverage – a higher federal match than traditional Medicaid and federal highway dollars. This new coverage has also meant major savings for the state and for many hospitals and clinics that face high uncompensated care costs. In its first year, Medicaid expansion has saved the state of Montana over $22 million. Montana will continue to see savings. What would make Medicaid expansion untenable is the current Senate efforts to cut the federal match, putting at risk coverage for thousands of Montanans.

The massive cuts to Medicaid coverage will not help the ongoing opioid epidemic in the state – actually, it could get a lot worse.  

Since 2015, Medicaid has become our state’s primary payer for substance use disorder (SUD) treatment services and a critical
tool in combatting alcoholism, methamphetamine use, opioid abuse and overdose, and the myriad social consequences of addiction. In fact, since the passage of Medicaid expansion, Montana has seen a 67% increase in federal dollars going toward SUD treatment. Eliminating Medicaid expansion and cutting Medicaid dollars will make it more difficult for Montanans to access the treatment they need and could further devastate our families and communities.

These are important facts for Senator Daines and Montanans to know as the Senate continues to negotiate a potential bill that could rip health coverage away from tens of thousands of Montanans. Montanans made their voices heard this week during the tele-townhall, and we need to keep sharing our stories and concerns about what this bill would mean for Montana families.

The Senate Health Care Bill is Just as Bad as the House Version

The Senate Health Care bill, released on Thursday, jeopardizes Montanans’ health and well-being by deeply cutting Medicaid, raising premiums for many Montanans, and causing tens of thousands of hard-working Montanans to lose their insurance. The Senate took the deeply flawed House-passed American Health Care Act (AHCA) and “tweaked it.” In some ways, the Senate bill is even worse than the House AHCA.

While details are still emerging about the Senate bill, let’s take a look at the most important provisions, and how they affect everyday Montanans:

First, the Senate bill would end Montana’s bipartisan Medicaid Expansion program, causing nearly 80,000 people to lose access to care.

Montana’s bipartisan Medicaid expansion program is the first of its kind in the country by utilizing a third-party administrator to provide health care coverage to nearly 80,000 Montanans. The Senate bill will effectively end Montana’s Medicaid expansion program in 2021, by ratcheting down federal matching funds well below what ACA provided. Most of those newly enrolled are working at low wages and will be left with little or no options for affordable health insurance.

Second, the Senate Bill drastically cuts and caps the traditional Medicaid program.

Over 216,000 Montanans rely on Medicaid for health care including people with disabilities, seniors, and families with children. Eight in ten Montanans on Medicaid live in working households. Many of these hard-working Montanans, however, work at jobs that do not provide insurance. Despite the outcry over the House’s deep cuts to Medicaid (over $800 billion by 2026), the Senate bill’s cuts are even harsher over the long run than the House bill. Under the House version, Montana is expected to lose $4.8 billion in federal Medicaid funding – 35 percent of its current law funding – between 2020 and 2026. We have yet to see a full analysis of the Senate proposal by Congressional Budget Office, but the bill appears to cut an even greater amount of federal Medicaid funds over time.

Third, the Senate bill would raise premiums and deductibles for thousands of Montanans who buy insurance on the marketplace.

The Senate bill pulls the rug out from under Montanans who rely on the marketplace for reasonable health care coverage. Because Montana is a rural state, health care costs are higher here than in other parts of the country. While the Senate version does take into account income and regional costs of insurance (similar to what ACA does), the level of tax credits and assistance is below that in the ACA for many middle-income Montanans. Insurance costs, especially for older Montanans, would rise sharply under the Senate bill. Montanans would also likely face higher deductibles and out-of-pocket costs under the Senate bill. Approximately 117,000 Montanans rely on the Marketplace for affordable coverage, and many are in danger of seeing their insurance costs rise to unaffordable levels.

Fourth, the Senate bill allows states to strip away important consumer protections for people with pre-existing conditions and others most in need of care.

While the Senate version does not include the House proposal to allow states to waive protections for preexisting conditions, there are a number of other provisions that could have a devastating impact on the over 420,000 Montanans that live with a pre-existing condition. The Senate bill would allow states to waive certain protections, such as the ACA’s requirement that insurance plans limit people’s total out-of-pocket costs, which will disproportionately hurt those with pre-existing conditions. The Senate bill also allows states to waive certain health benefits, including access to, to maternity care, mental health care, or substance abuse treatment. With the opioid crisis spreading across Montana, a bill that reduces access to health care will only make the problem worse.

Conclusion

Because we are still waiting on a CBO score, it’s unclear exactly how many Montanans will lose insurance coverage under the Senate Bill. But make no mistake – this bill, like the one in the House, reduces coverage, increases health costs for many, strips consumer protections, and endangers Medicaid as well as the state’s own finances.

Montana’s senators should not support this bill due to the devastation it would cause for tens of thousands of Montanans. Anything less would break their promise to the people of this state.

House vs Senate Bill Checklist - Final[2]

Wonky Word: Substance Use Disorders (SUDs)

The debate continues around the House-passed American Health Care Act (AHCA) and now the Senate’s effort to craft a similar bill that will effectively end Medicaid expansion, dramatically cut Medicaid funding, and result in loss of coverage for millions of Americans. In our effort to continue to provide information on AHCA, we provided details earlier this week on what Essential Health Benefits (EHBs) are. One of these ten EHBs is mental health and substance use disorder (SUD) services, which includes behavioral health treatment. Substance use disorder, also known as drug use disorder, is a condition in which the use of one or more psychoactive substances leads to a clinically significant impairment or distress.

Substance use disorders are a nationwide problem, and Montana is all too familiar with alcohol and drug abuse. Montana residents have a higher rate of alcohol dependence or abuse than the national average, as well as a higher rate of untreated illicit drug dependence or abuse.

At the end of May, the Montana Department of Justice announced a new effort through the office’s Aid Montana initiative to gather input from Montanans regarding how best to address substance abuse. Over the summer, the Montana Department of Justice will partner with the Montana Healthcare Foundation to hold six listening sessions across the state to hear real life experiences of individuals affected by substance abuse.

These listening sessions should provide great feedback; however, there is one thing we already know: the Affordable Care Act and Medicaid Expansion funding provide the foundation to effectively addressing substance use disorders. The ACA and the state’s Medicaid expansion provide critical resources and services to those Montana residents battling addiction personally and the family members impacted by drug and alcohol abuse.

While we do not know what will be included in the Senate’s version, press reports indicate the Senate is sticking fairly close the House-passed bill, which would land a devastating blow to mental health and opioid addiction treatment due to the following components of the bill:

  • Dramatic cuts to Medicaid will cut billions in federal funds provided for substance use disorder treatment. Since 2015, Medicaid has become our state’s primary payer for SUD treatment services and Montana’s most potent
tool in combatting alcoholism, methamphetamine use, opioid abuse and overdose, and the myriad social consequences of addiction. In fact, since the passage of Medicaid expansion, Montana has seen a 67% increase in federal dollars going toward SUD treatment. A radical restructure of Medicaid, by converting it to a per capita cap will result in the loss of nearly $5 billion in federal Medicaid funds.  To compensate, Montana would have little choice but to cut eligibility, cut payments to hospitals and doctors, and/or cut benefits — including behavioral health services.
  • A return to pre-ACA coverage could result in the elimination of mental health and substance use treatment in private insurance plans. The AHCA allows states to waive certain essential health benefits, and this includes mental health and substance use treatment. Prior to ACA, almost no state required insurance companies to cover these services, and it is likely states will again start waiving these benefits.

As in most states, substance use disorder is a serious and growing public health problem in Montana. We can face this problem head on by maintaining the crucial federal Medicaid funds to pay for substance use disorder treatment. We can’t afford to lose this lifeline to recovery in Montana.

Wonky Word: Essential Health Benefits 

During recent weeks, you have probably heard the term Essential Health Benefits repeatedly as Congress continue efforts to repeal and replace the Affordable Care Act (ACA). Right now, the Senate GOP leadership is cooking up their version of a health care bill behind closed doors and could take a vote before the July 4th recess.

The House-passed GOP plan eliminates Medicaid expansion and dramatically cuts Medicaid funding. Congress is also considering measures to allow states to waive the essential health benefit rules within the ACA. What are “Essential Health Benefits” and why have they become so central in the debate around health insurance coverage in America?

Essential Health Benefits (EHBs), also called federal minimum benefit standards, are at heart of the ACA. EHBs outline a set of ten categories of services that health insurance plans must cover at minimum. States must also provide EHB to beneficiaries eligible under the ACA’s Medicaid expansion, and plans may offer additional benefits such as dental and vision coverage.

Prior to the ACA, it was up to each respective state to determine what benefits (called insurance mandates) had to be included in insurance plans. Not surprisingly, states differed widely in terms comprehensiveness required, and no specific benefit was deemed essential in all 50 states and Washington, D.C.

EHBs provide coverage that offers viable protection against some of the most basic health care costs Americans experience and were designed to provide marketplace consumers with insurance coverage similar to the coverage of employer-sponsored insurance and Medicaid.

So, every health plan must cover the following services1: 

  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency services
  • Hospitalization (like surgery and overnight stays)
  • Pregnancy, maternity, and newborn care (both before and after birth)
  • Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
  • And these two additional benefits:
    • Birth control coverage (contraceptive methods and counseling for all women)
    • Breastfeeding coverage (breastfeeding equipment and counseling for pregnant and nursing women)

Before the ACA, most health insurance frequently did not cover these basic services. For example, in 2011, among people in the individual market:

  • 62 percent had plans that didn’t cover maternity care;
  • 34 percent had plans that didn’t cover substance use treatment;
  • 18 percent had plans that didn’t cover mental health; and
  • 9 percent had plans that didn’t cover prescription drugs.

Under the GOP’s replacement plan, comprehensive insurance, with benefits like maternity or mental-health coverage, could become unaffordable—if not unavailable.

If the Essential Health Benefit standards were eliminated, individual and small-group market plans would quickly revert to the pre-ACA status quo and would likely:

  • Leave people who have pre-existing conditions without the coverage they need. People with pre-existing conditions — who need services like substance abuse treatment,mental health services, or comprehensive prescription drug coverage — often wouldn’t be able to find the coverage they need at any price, much less an affordable one.
  • Charge women more than men for coverage. In practice, eliminating Essential Health Benefit requirements means that women would once again be charged more than men, since they’d have to pay more for plans with maternity coverage — if they could even find a plan.
  • Burden even insured people with unaffordable bills and medical bankruptcies. Before the ACA, millions of people had health insurance that wouldn’t actually cover them if they got sick. Plans often had annual and lifetime limits on coverage and no limits on individuals’ out-of-pocket costs, and they omitted key services.The ACA fixed this by prohibiting annual and lifetime limits and setting an annual limit on what enrollees can be required to pay out-of-pocket for deductibles and other cost-sharing. Eliminating the Essential Health Benefit standards would make these rules meaningless.