Montana is on the correct track for Medicaid reform

The Treasure State is taking important steps to help control the exploding costs of Medicaid while providing critical care to the neediest. Montana is submitting a 1115 Medicaid Demonstration waiver application to allow experimentation with reform. Other states should follow this good example.

As explained by Governor Gianforte, “The safety net of Medicaid should be there for those who truly need it, but if everyone is allowed to climb upon the net, it will collapse. By requiring healthy adults to engage in work-related activities and cost sharing, we can help preserve the long-term sustainability of the Medicaid program and ensure that this critical health coverage remains available for those who need it most.”

The state’s Department of Public Health and Human Services Director, Charlie Brereton, said, “Montanans who can find employment and improve or gain new skills while maintaining access to essential health care services are best positioned to support themselves and their families. We are committed to promptly implementing work requirements and premiums for individuals enrolled in Medicaid expansion, as we firmly believe these program elements will foster self-sufficiency and lead to independent, healthier futures for enrollees.”

Medicaid began in 1965 as a health insurance safety net for the most vulnerable Americans. It was financially set up as a 50/50 joint state and federal entitlement. Obamacare greatly expanded the program to any lower-income, able-bodied adult ages 18 to 64 years, with the federal government contributing 90 percent of the costs.

The original Obamacare law required all states to expand their Medicaid programs. The United States Supreme Court ruled that states had the option of expanding Medicaid under Obamacare. Montana, along with 39 other states, chose to expand their program.

The Obamacare law allows states to experiment with innovative Medicaid reforms by using a federal waiver system. After being turned down by the Biden Administration, Montana has reapplied for a waiver that would require “working-age” and “able-bodied adults” in the expansion program to pay a premium and to seek work or community service. As stated by Director Brereton, “the waiver aims to reduce government dependency and encourage self-sufficiency and upward economic mobility for low-income adults.”

In inflation-adjusted dollars, Medicaid has exploded from $1 billion in the first year to almost $1 trillion last year and is now one of the top three budget items for every state. Over 20 percent of Americans are now in the entitlement, pushing it to unsustainability in its current form.

Common-sense Medicaid reforms are necessary to ensure that the program will continue for those who are the most vulnerable. Like welfare reform in the 1990s, Medicaid should be considered a temporary entitlement. A work requirement and a small co-pay offer a path to responsibility and provide a potential course to not only get recipients off the entitlement but also give them access to a better economic future.

Montana officials should be congratulated for their Medicaid waiver application. Let’s hope other states follow their lead.