Medicaid's Western Push Hits Montana

The Affordable Care Act is on the move in Western states, with the governors of Utah, Wyoming and Montana all working on deals with the Obama administration to expand Medicaid in ways tailored to each state.

But getting the federal stamp of approval is just the first hurdle. The governors also have to sell the change to their state legislators, who have their own ideas of how expansion should go.

The latest example is Montana, where the governor and the legislature have competing proposals about how much federal Medicaid expansion cash the state should try to bring in.

Montana's GOP-dominated legislature, which meets every other year, rejected Democratic Gov. Steve Bullock's attempts in 2013 to expand Medicaid and set up a state-based insurance exchange. This year Bullock has a different Medicaid proposal that aims to reduce Montana's 17 percent uninsured rate. It would use federal money to contract with a third-party administrator to process claims and run a provider network.

So far, Republican leaders aren't embracing it with any more enthusiasm than they did his 2013 plan.

Nine Republican state lawmakers proposed an alternative they call the "Healthy Montana Family Plan." In doing so, they dismissed arguments by Bullock and the White House that Medicaid should be offered to anyone making as much as 138 percent of the federal poverty level, or $16,105 a year. That would be an estimated 70,000 people in this sparsely populated state with just over 1 million residents.

Instead, the plan would extend Medicaid to only some people making up to 100 percent of FPL or $11,670. The idea is to "keep it targeted toward what it's intended to do," says plan co-author Sen. Fred Thomas, "take care of our most vulnerable citizens — disabled persons, low income seniors, low income parents, children."

"Able-bodied people should be able to go out and get a job," incoming Republican House Speaker Austin Knudsen told the Billings Gazette.

Thomas, an insurance agent by trade, says that extending Medicaid to non-disabled adults who don't have children is "a disincentive to work."

Of people who make too little to qualify for subsidies, Thomas says, "Anyone that's in that predicament, we're going to encourage them to get another job, get the extra hours, and qualify for the exchange, by bumping their income up a little bit."

He points out that under the Affordable Care Act low income people who make at least 100 percent of the federal poverty level, or FPL, qualify for premium subsidies through HealthCare.gov, which makes health coverage "pretty economical," or nearly free.

The plan he co-authored says, "Policymakers could employ income tax credits in certain circumstances to boost incomes of those without Medicaid access above 100 percent FPL in order to take advantage of sliding-scale exchange subsidies."

That reliance on subsidies could hit a snag if the Supreme Court decides in June that it is illegal for those tax subsidies to flow to states that are using HealthCare.gov rather than setting up their own exchanges.

The Montana Republican health plan also echoes policies advocated by former Obama administration Medicaid and Medicare leader Don Berwick. It calls for risk-based contracts for providers, and for rewarding them based on measures "that focus on health outcomes, patient satisfaction and cost containment." The health law enacted many of those rewards and penalties for hospitals that treat Medicare patients.

This story is part of a reporting partnership that includes Montana Public Radio, NPR and Kaiser Health News.