MBPC Explains Why Medicaid Expansion is a Good Deal for Montana

“Montana Must Move Forward on Medicaid Expansion,” Sarah Wilhelm, Opinion, Bozeman Chronicle, July 17, 2012.

Each year, more than 160,000 Montanans go without health insurance coverage for their families. For thousands more, the cost of health insurance is making it harder and harder to meet their other basic needs.

The Supreme Court’s recent decision to uphold the Affordable Care Act is an enormous victory for these Montana families. Because of the ruling, young adults under age 26 can remain on their parent’s health insurance until they obtain steady employment that provides coverage. As young people across Montana struggle to find employment in a sluggishly recovering economy, this could provide critical preventative or live-saving care. The decision also prevents insurers from denying coverage to people with pre-existing health conditions like cancer, diabetes, asthma and autism. And it bars them from cutting off coverage for people with costly medical conditions.

However, the Supreme Court ruling also left one critical decision up to the states. Our elected officials must decide whether to expand our Medicaid programs to cover low-income adults. As it stands, the state offers coverage to working parents making less than 55 percent of the poverty line. In real terms, this amounts to $10,500 a year for a family of three. The Medicaid expansion provision in the Affordable Care Act would extend coverage to adults making up to 133 percent of the poverty line ($25,390 for a family of three), covering over 57,000 currently uninsured Montanans.

Beyond narrow ideological motives, Montana has little basis for refusing to implement the Medicaid expansion. The Affordable Care Act provides 100 percent federal funding for the expansion of Medicaid for its first three years, later phasing down to 90 percent federal funding. The Congressional Budget Office estimates that the federal government will bear nearly 93 percent of the costs of the Medicaid expansion over its first nine years. The additional cost to Montana will be just 4 percent to 6 percent more than what we would have spent on Medicaid from 2014 to 2019 in the absence of health reform. These figures substantially overestimate the cost because they don’t recognize the savings to our state and local governments from reducing the money we currently spend providing health care in emergency rooms and health clinics to people without insurance.

On the other hand, refusing to expand Medicaid will result in extreme inequity in health insurance coverage. Montanans with incomes between 100 and 400 percent of the poverty line will be eligible for subsidies to help them afford coverage in the new health insurance exchanges. Unfortunately, people living below the poverty line won’t be eligible to receive these subsidies since the drafters of the Affordable Care Act assumed they would be covered under expanded Medicaid.

The Supreme Court decision was an important step forward in the battle to ensure that all Americans receive the health care they need. Now Montanans must do our part. It is up to our state’s policymakers to avert a deeply inequitable outcome by moving forward with the Medicaid expansion. The benefits to our communities and families greatly outweigh the small costs to the state.