Montanans covered by Medicaid for at least three years make fewer trips to the emergency department and incur lower costs for intensive or inpatient care, a report released this week shows.
About 40% of low-income adults without disabilities on Medicaid — the population covered through an expansion of the program Montana lawmakers first approved in 2015 — made a trip to the emergency room at least once during their first year of enrollment. By their third year, that number dropped by over 10%, according to data collected and analyzed by the Montana Healthcare Foundation. The foundation is a nonpartisan organization that doesn't lobby lawmakers.
“The hope with expansion all along was that people would have better access to services that would help prevent or catch diseases earlier,” said Aaron Wernham, the foundation’s chief executive officer and a family physician.
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In 2022, approximately one of every five Montanans was enrolled in Medicaid, including 38% of the state's kids and teens up to age 18. About 65% of Medicaid members in Montana live in rural areas. It’s a particularly critical resource for Native Americans, who account for roughly 7% of the state’s total population but 20% of total Medicaid enrollment.
In April 2023, Montana, along with all states, began to redetermine eligibility for Medicaid after coverage had been automatically renewed during the COVID-19 public health emergency. Around 130,000 Montanans have lost their Medicaid coverage as a result of redetermination, many due to procedural errors.
The Medicaid in Montana report doesn’t reflect the impact of redetermination in most of its analyses. Wernham said conversations with providers and partners suggest many people who lost Medicaid coverage have not regained insurance.
To qualify for Medicaid, people must meet several requirements to show they're in need of health care assistance, as well as be low-income. For example, a household of four cannot earn more than $31,200 before taxes on traditional Medicaid or $43,056 for those in the expansion population.
Medicaid is a state-administered program that’s heavily subsidized by the federal government.
Although overall spending on the program has steadily increased over time, the share of the state’s general fund budget allocated to Medicaid has remained basically the same.
Last fiscal year, Montana’s Medicaid budget was about $2.4 billion. Of that, nearly $1.9 billion was reimbursed by the federal government. Services rendered through the Indian Health Services and other tribal facilities receive nearly full federal reimbursement, and most care provided to people enrolled in Medicaid under expansion recoup about 90% of the costs.
Since 2015 when the state expanded Medicaid eligibility, Montana has spent approximately 13% of its general fund on the program every year. That’s lower than the national average and most peer states, even those that did not expand Medicaid such as Wyoming, according to analysis from the Montana Healthcare Foundation.
Behavioral health
About one-third of Montana residents covered by Medicaid have received a behavioral health diagnosis. That’s a greater share than the 21% nationwide who are privately insured and have been diagnosed with mental illness, according to a 2020 KFF analysis. Nationally, those diagnoses are more likely to be considered serious for people covered by Medicaid as compared to private insurance.
Between 2018 and 2022 in Montana, services delivered to Medicaid members increased by 89% for opioid disorders and 48% for anxiety disorders, the Montana Healthcare Foundation found. Primary care providers versus specialty care settings delivered services for opioid disorders more than half the time.
When asked whether these increases are due to greater need or more screenings, Wernham said there’s no real way of knowing from the data the foundation analyzed. He hypothesizes that it’s probably a combination of more people coming in for care who are being screened for conditions that may have gone undiagnosed previously as well as more prevalence of mental health conditions.
“What this is telling us, and what we certainly know, is that mental illness and substance use are very top-priority health problems in communities across the state,” Wernham said.
Greater numbers of Medicaid enrollees driven by expansion facilitated the Legislature’s decision to increase reimbursement rates to a spate of health care providers during the 2023 session. For years, Montana Medicaid had underpaid behavioral health providers by at least 22%, according to a government report.
Better reimbursement rates will allow these systems to grow over time, hiring more practitioners and expanding outreach in order to meet patients where they are, Wernham said, calling expansion the gas to that engine.
“The Legislature and governor have taken important actions to help the state move in that direction,” he said. “But if you take the fuel away, you’ll have a wonderful vehicle that can’t go anywhere.”
Even with Medicaid expansion, disparities persist
Despite the report’s conclusions that increased insurance coverage has led to vastly improved outcomes, health disparities continue to exist. They are particularly pronounced in Native communities across Montana, where people have the lowest life expectancy of any racial or ethnic group, even when compared to white rural neighbors.
Medicaid expansion has made preventative services more accessible for American Indian communities. Based on 2022 claims data, more than 10,700 American Indians covered by Medicaid expansion received such services, a 17% increase from the year prior. More than 4,600 Native people insured through Medicaid expansion received mental health treatment and over 1,400 received substance use disorder treatment, marking significant jumps since 2017.
But insurance coverage is only one part of the solution. Building out a health care workforce and infrastructure takes much longer than the less-than-a-decade time frame since expansion went into effect in Montana.
“It’s one provider, one service at a time,” Wernham said. “Recruiting, retaining, building buildings, it all takes time. Medicaid expansion gives us the engine to drive that. We have a reimbursement source once you can stand the system up, but it takes the system a while to capture the benefit and deliver the services they need.”
And then there’s the reality that even the most robust health care system doesn’t exclusively drive positive health outcomes. Closing long-standing health gaps requires addressing systemic barriers such as trauma, discrimination and obstacles to basic needs such as housing, work and healthy food.
“All of these things affect health,” Wernham said. “And those are beyond the health care system's ability to close the gap.”
Medicaid is likely to be one of the main issues at the state’s next legislative session in 2025. Medicaid expansion is set to expire in June of that same year, unless lawmakers opt to renew it for the second time. Montana first expanded Medicaid under the Affordable Care Act in 2015. The Legislature renewed the program once again in 2019.