Montana Republicans and Democrats reached a compromise to extend the state's Medicaid expansion program for six years and add an 80-hour monthly work requirement for enrollees.
The complicated Medicaid Reform and Integrity Act, signed by Democratic Gov. Steve Bullock Thursday, would require a reevaluation of the work program if more than 5% of the 96,000 low-income adults currently enrolled were dropped from coverage due to not complying with the new work and reporting requirements.
If an independent auditor found that more than 10% of people losing coverage were wrongly dropped, the Legislature would have to reconsider the program.
That provision was a response to the experience of Arkansas' first-in-the nation Medicaid work requirement, which caused the disenrollment of more than 18,000 people last year. In March, a federal judge invalidated the CMS' approval of Medicaid work requirement waivers for Arkansas and Kentucky because the agency didn't adequately consider the potential negative impact on coverage.
At least partly due to those legal challenges, Republican lawmakers in Montana, Utah and other states have reconsidered their approach to establishing Medicaid work requirements, which they argue will improve the health and economic well-being of beneficiaries. GOP lawmakers in several other states like Iowa dropped their efforts to establish a work requirement following the court rulings.
Utah Republicans passed a limited Medicaid expansion bill in February that requires enrollees to complete 48 job searches within the first 90 days, rather than reporting a minimum number of hours of monthly employment. Other states with CMS work requirement waivers require enrollees to participate in 80 to 100 hours per month of employment, schooling or volunteer activities.
The Montana bill extends the state's expansion program launched in 2015, which is credited with boosting the state's economy and helping keep rural hospitals afloat. Last November, voters rejected a Montana Hospital Association-sponsored ballot initiative that would have renewed the current expansion and funded it with a $1 per pack cigarette tax.
The Montana work requirement would begin Jan. 1, 2020, if the state's Section 1115 waiver request is approved by the CMS, which has looked favorably on state work requirement waivers. It would give expansion enrollees 180 days to come into compliance.
The new law will require the state to use existing data sources wherever possible to determine whether people are meeting the work and community engagement requirement or else are exempt because they are students, have a disability, are pregnant, serve as caregivers, or fit into other exempt categories.
That may reduce the number of people who are knocked out of the program because they don't know about, understand or have the capacity to report their work status or exemptions on their own.
Nevertheless, it's projected that nearly 4,000 people will be disenrolled for not reporting or meeting the work requirement.
The bill also adds $3.5 million in new funding to a work readiness program, called HELP-Link, that was created at the time of the original expansion. According to the Montana Department of Labor and Industry, 25,000 expansion enrollees have enrolled in the program's workforce training, and 70% of participants were employed within a year. The program is seen as a model for other states that have established or are considering Medicaid work requirements.
"We would have preferred a straight expansion with no work requirement, but we also were willing to find a middle ground to make sure individuals would continue to have access to health coverage by having these additional community engagement requirements," said Jean Branscum, executive vice president of the Montana Medical Association.
Still, she and other observers say the extent of the coverage losses will depend on how the state designs and administers the new reporting requirements.
"A lot remains to be seen," said Dr. Aaron Wernham, CEO of the Montana Healthcare Foundation, which had projected that a previous version of the work requirement would have caused up to 56,000 people to lose benefits. "It will depend quite a bit on the implementation."
While the state can use administrative data to help determine whether people are in compliance or have an exemption, he added "it likely will create more work for individuals, and it will be quite a bit more work for the state to set up a system to determine these exemptions."
Despite the caveats, Rich Rasmussen, CEO of the Montana Hospital Association, praised the willingness of legislators, Gov. Bullock and stakeholder groups to negotiate a compromise to preserve the state's Medicaid expansion.
"What we wanted was an expansion that brought Montana together to support covering 96,000 folks and continue the $2 billion economic stimulus that has had a big impact on every community in the state," he said. "It became a bipartisan product."