Rosendale to feds: Send state block grants to deal with Medicaid expansion

Missoulian – March 9, 2017

Montana’s Commissioner of Security and Insurance wants to see the state’s Medicaid expansion administered through block grants, which he argues gives states more control.

Matt Rosendale, who was elected to the state Auditor and Commissioner of Security and Insurance last November, made the recommendations earlier this week in a letter sent to Montana’s two senators, Republican Steve Daines and Democrat Jon Tester, along with Republican Sen. Lamar Alexander, chair of the House committee that would have heard House Republicans’ plan to replace the Affordable Care Act, also known as Obamacare.

The American Health Care Act dismantles key provisions of Obamacare. Previous President Barack Obama’s landmark legislation brought health insurance to millions — Montana saw its uninsured rate drop from 20 to 7 percent — but Republican President Donald Trump campaigned on repealing and replacing it, saying the act led to rising premiums and made health care unaffordable.

Montana expanded Medicaid in the 2015 Legislative session with the passage of the Montana Health and Economic Livelihood Partnership Act. Expansion brought coverage to those who earned up to 138 percent of the federal poverty rate. So far 71,000 have enrolled. Adults generally pay premiums equal to 2 percent of their household incomes. Thirty other states also expanded Medicaid.

The American Health Care Act proposes to continue Medicaid expansion funding as proposed under Obamacare until 2020, and will continue to reimburse states at 93 percent of costs until that point. States will be reimbursed less for those who sign up after that.

Opponents argue the system will halt Medicaid expansion because Montana could not afford to pay for the program without sufficient federal funding.

“Montana families and state policymakers should be very concerned about moving forward with a bill that effectively ends Medicaid expansion that has provided coverage to over 70,000 Montanans, shifts costs for Medicaid to the state, and makes coverage less affordable and out of reach for many Montanans,” said Heather O’Loughlin, co-director of the Montana Budget and Policy Center.

The bill also says anyone who is not covered under expansion for more than a month would not be able to get the same higher-level reimbursement rate if they sign up again.

That is troubling to some who said that many Medicaid recipients “cycle” through the program, meaning they earn enough to not qualify for period of time but then experience a job loss or other event that makes them eligible for coverage again. Those patients would be reimbursed at the lower rate when they sign up again

Montana has received $284 million in federal money since the enrollment under the HELP Act started Jan. 1, 2016, according to numbers provided by the Department of Public Health and Human Services. The state also saves $22 million a year in general fund money by transitioning people who were on Medicaid, which requires a 35 percent state match, to coverage under the HELP Act, which is fully paid for by federal money.

Rosendale argued by giving states more control over what can be done with Medicaid expansion money, legislatures like Montana’s could “develop more efficient and effective health care delivery reforms to protect those in need.”

“Montana solutions are better than one-size-fits all mandates from Washington,” Rosendale said Thursday. “”The people in Washington, D.C., are not going to be able to provide the solutions for the entire nation.”

Rosendale floated a few possible ideas for how to use potential block grants, including funneling some of the money into health savings accounts for people to choose how to spend.

“If we have the ability for those dollars to transfer down in the form of HSAs, that provides the incentive to get out there and shop (for the least-expensive medical care),” he said. “The people of Montana can do better for themselves and their families than any legislative body.”

On Thursday a working group that is aiming to prepare Montana for whatever might happen at the federal level met to discuss the American Health Care Act. The group includes Democratic and Republican legislators, as well as industry representatives. Rosendale stressed to the group that the federal legislation will change as it works its way through Congress.

While the working group discussed drafting legislation to be able to respond if the plan is signed into law by President Trump, uncertainty at this point is why Gov. Steve Bullock, a Democrat, told reporters Thursday he doesn’t want the state rushing to create plans to respond to hypothetical scenarios.

Still, the governor expressed disappointment with what’s in the current bill, calling it a “sucker-punch to rural states like Montana.”

“Flexibility on the one hand always sounds good but if flexibility doesn’t come with sufficient funding, those of us in the states have to pick up the pieces.”

While Bullock emphasized some parts of the bill, such as changes to Medicaid expansion, don’t call for implementation until 2019, he believes slowing the process to deliberate more is necessary.

“My perspective is Congress certainly should’t rip health care away from millions of Americans and certainly a lot of Montanans without presenting a viable alternative.”

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