Medicaid expansion in Alaska, Montana threatened by midterm results

Medicaid expansion in Alaska and Montana potentially could be rolled back or repealed as a result of Tuesday's midterm election results.

If that happens, it would be the first time the extension of coverage to low-income adults under the Affordable Care Act was ever reversed. That prospect alarms expansion supporters, who cite numerous polls and successful ballot initiatives as evidence that the public strongly supports Medicaid expansion, even in conservative states.

"There certainly is concern that expansion could go away," said Becky Hultberg, CEO of the Alaska State Hospital and Nursing Home Association, which wants to keep that state's coverage expansion. "But to take health insurance away from 45,000 Alaskans would be difficult."

On Tuesday, Alaska voters elected a new Republican governor, Mike Dunleavy, who has criticized the costs and benefits of the expansion. The state's outgoing Independent Gov. Bill Walker ordered Medicaid expansion in 2015. Dunleavy has not offered any alternative proposal, and some members of the state's GOP-controlled Legislature share his skepticism.

Meanwhile, Montana voters soundly rejected a ballot initiative sponsored by the Montana Hospital Association to renew that state's nearly three-year-old Medicaid expansion and fund it by sharply increasing the cigarette tax and establishing a new vaping tax.

Now it will be up to the Republican-controlled Legislature to decide the fate of the program, which covers nearly 100,000 Montanans, when it expires in June.

"This is bad news for Montana hospitals," said Montana Republican state Rep. Rob Cook, who helped pass the expansion in 2015. "They could go home without anything."

Up to now, the steady national movement has been toward more states offering coverage. Three additional states, Idaho, Nebraska and Utah joined 32 other expansion states Tuesday when their voters approved binding ballot initiatives to enact expansion. Idaho officials have to submit a state plan amendment to the CMS for expansion within 90 days, while officials in Nebraska and Utah have until April 1, 2019.

In addition, Democratic gubernatorial candidates promising to enact Medicaid expansion won elections in Kansas, Maine and Wisconsin.

Beyond that, the union-backed Fairness Project, which funded the successful expansion ballot initiatives, is exploring putting similar measures on the ballot in at least five more states, including Florida, Mississippi, Missouri, South Dakota and Wyoming, said spokesman Colin Diersing.

"Medicaid enjoys very solid bipartisan support," said former CMS administrator Andy Slavitt during a Families USA teleconference Wednesday assessing the election outcomes. "I think other states will follow Utah, Idaho and Nebraska and put this on the ballot."

Cook said the passage of the expansion initiatives in three deep-red states could soften the opposition to expansion among Republican governors and legislators in other conservative states, including Montana.

But Dunleavy, an Alaska state senator, ran for governor on a platform of cutting taxes and spending in a state that faces a continuing large budget deficit due to a big drop in oil prices. He said if he were elected, he would review the program to find ways to reduce its costs, even though analysts say the bigger cost crunch comes from the growth of the traditional Medicaid program.

While no one knows exactly what changes Dunleavy will propose when he offers his first budget in January, it's expected that he, like other Republican governors, will recommend establishing a work requirement for expansion enrollees. Not only would that be logistically challenging in a vast, rural state like Alaska, it also would increase the cost of the program, Hultberg said.

"The expansion has been critical for maintaining coverage and has been a tremendous lift to the economy during this recession," she said. "We hope the new governor will see that expansion has been a net benefit to the state."

In Montana, there were questions about the political wisdom of the hospital association's decision to seek renewal of the state's expiring Medicaid expansion program through a ballot initiative proposing a big tobacco tax hike, rather than through legislation.

Hospital leaders have said they felt compelled to go that route because they couldn't get assurances from Republican legislative leaders that they would pass legislation to extend the program next year. Lawmakers said they wanted hospitals to agree first to help finance it and go along with adding work requirements as a condition of eligibility.

Two tobacco companies, led by Altria, spent an estimated $17 million to defeat the initiative, a staggering amount in a sparsely populated rural state.

"It was a bad play," Cook said. "Big tobacco brought a fortune to the table, and they ran one hell of a campaign."

In a written statement, Montana Hospital Association CEO Rich Rasmussen accused the tobacco companies of lying about the initiative and said his organization is proud of its work to maintain access to coverage and care.

"Montana hospitals and other care providers carry their commitment forward knowing that time is of the essence in preventing 100,000 of our neighbors from losing their existing health coverage," he said. "Big Tobacco can't cloud the fact that Medicaid expansion has been a bipartisan success."

Despite the initiative's defeat, GOP lawmakers could pass a bill during the next session starting in January to seek a federal Medicaid waiver to roll back the expansion to a smaller number of people and impose work requirements, said Jean Branscum, CEO of the Montana Medical Association, which supports the current expansion program.

But that would leave many Montanans uninsured and drive up uncompensated care costs, she added.

"We'll support anything that strengthens the program," Branscum said. "But if expansion only covered 35,000 or 50,000 individuals, we'll go back to having a high uninsured population and the shifting of costs to people who are insured.

Cook fears the entire Montana Medicaid expansion is at risk in the wake of the initiative's failure, because his conservative Republican colleagues may choose to do nothing to keep it going.

"Any legislator who wants to take a powder can now say, 'The people have spoken and they don't want expansion,'" Cook observed. "That's absolutely not what the voters said. But who in their right mind is going to vote for a referendum to tax themselves?"