Montana's Medicaid expansion program has saved the state health department more than $30 million since its start in January 2016, mostly because the federal government paid a bigger share of the costs for some recipients, officials said.
Erica Johnston with the Department of Public Health and Human Services told a legislative oversight committee last week that the program covers nearly 84,000 residents and has paid for $574 million in healthcare services since it began.
Under the Affordable Care Act, the federal government began picking up all of the costs, rather than 65% of the costs, for families with children and incomes between 24% and 50% of the federal poverty level as well as for people with severe mentally disabling conditions, people determined to be medically needy, and women in the breast and cervical cancer program.
Beginning in January, the state became responsible for 5% of those costs. The state will have to pick up 6% of the costs in 2018, 7% in 2019 and 10% starting in 2020.
Johnston told the Medicaid Expansion Oversight Committee that even as the state continues to pay a share of the costs for recipients under Medicaid expansion, Montana is still ahead of the game. "Our current budget crisis would be worse today in the absence of Medicaid expansion," she said.
Enrollees are required to pay 2% of their monthly income in premiums. The state has collected $5.6 million in premiums, Johnston said.
The state Department of Corrections meanwhile reported that it has saved several million dollars on inmate hospital stays since January 2016 because of Medicaid expansion. The department automatically applies for Medicaid coverage for inmates. While they are not eligible to receive benefits while incarcerated, coverage begins if they are admitted to the hospital for more than 24 hours. Without the expansion, the department would have been responsible for those charges, Johnston said.
The billed charges were more than $8 million, but that's not necessarily how much the department would have paid.
The Department of Corrections also began reimbursing other outside medical claims at the Medicaid rate, rather than the higher commercial rate, saving $7.66 million in the fiscal year that ended in June, the department said.
Bob Olsen, vice president of the Montana Hospital Association, told the committee that change hurt small hospitals near Montana's corrections facilities. For example, the Deer Lodge Medical Center received $1.2 million less in payments from the prison over one year, he said.
Olsen suggested the Legislature might want to look at the effects of the payment model on smaller hospitals near correctional facilities when Medicaid expansion is up for renewal in 2019.