MTPR

Feds Unlikely To Approve Montana Medicaid Expansion Plan In Its Entirety

Jul 7, 2015

Montana’s legislature said yes to Medicaid expansion this spring, but the state’s expansion plan still needs approval by the federal government.

Today, the state made the details of its expansion plan public, and is giving the public 60 days to comment on the plan before sending it to the White House.

Tara Veazey is Governor Steve Bullock’s health policy advisor. She says she’s confident that Montana’s proposal will ultimately be approved.

"We’re confident we can get there, but it’s certainly the beginning of what is always a challenging process with a regulatory body."

Joan Alker, at Georgetown University's Center For Children and Families, is an expert on state Medicaid expansion plans, and the waivers from standard Medicaid rules that a minority of states, including Montana, have asked for to implement Medicaid expansion the way they want to.

"All of these waiver negotiations require some flexibility on both sides. A waiver proposal never comes out the way that it went in."

The waiver Montana is requesting asks for permission to do several things that are not standard Medicaid practice. Perhaps the most contentious is requiring new Medicaid recipients to pay a premium of up to 2% of their income in exchange for coverage.

"So, in general premiums are not permitted in the Medicaid program, and a state definitely needs a waiver to move ahead with any kind of proposal."

But, Alker says, the federal Center for Medicare and Medicaid Services, or CMS, which evaluates state waiver proposals, has approved some states charging premiums for the new Medicaid expansion program.

"What we’ve seen so far is that CMS is definitely willing to approve premiums of 2% of income for those above the poverty line."

That last bit, about approving Medicaid premiums for those above the poverty line is crucial, because Montana’s Medicaid expansion proposes charging everyone in the new, expanded Medicaid program premiums, even those below the poverty line.

Alker thinks the feds are likely to negotiate for that to be dropped.

"And that’s because there’s a lot of research showing that premiums for very low income people deters enrollment, and creates a barrier to coverage that we know will result in many people not getting coverage. And that’s why CMS has raised questions about premiums as other states have raised them."

Alker says the federal government has not approved any other state’s proposal to charge Medicaid premiums to those below the federal poverty line, which is just under $12,000 a year. Montana’s waiver request also asks for permission to charge Medicaid recipients co-payments for all but the most basic preventive health care services.

"So, Montana’s looking to charge a lot of co-payments. Essentially every co-payment that the federal government will allow them to. From a health-policy perspective I think that's unfortunate. Again, we know from a lot of research that co-payments deter access to needed care as well as unneeded care for low income people. That's kind of a different thing for middle-class people for who co-pays might be an appropriate instrument. So they are allowed in the Medicaid program. The federal government is going to allow them to charge co-pays, but from a health-policy perspective, I think that's a bad policy choice."

Eric Whitney: Sounds like you wouldn’t be surprised if the counteroffer from CMS asks for smaller co-pays?

"No, I don’t think CMS is going to ask for smaller co-pays because, unbeknownst to many, the Medicaid program already allows a fair amount of flexibility. I think the issue is going to arise with respect to the state's desire to charge both co-payments and premiums to people below the poverty line. So that's a double hit for those low-income folks that could prevent them from accessing coverage and needed services. So I think that's where some negotiation is going to have to happen," Alker says.

So, if the kinds premiums and co-payments Montana’s Medicaid expansion plan is asking the federal government to approve are unlikely to actually be OK’d, why were they written into the law in the first place?

Tara Veazey, Governor Bullock’s health policy advisor explains.

"Legislators, Democrats and Republicans alike were committed to finding a compromise that could get this done in Montana, and doing so required having some compromise policy that again required federal approval, but ended up making Montana the only state in the country that passed Medicaid expansion this year, so I think we have a lot to be proud of in Montana."

Veazey says she recognizes that Montana’s Medicaid waiver request, and specifically the parts of it requiring premiums and co-pays, will be closely scrutinized by the White House.

"I think that there is a level of concern there, but that they don’t pose barriers to ultimately getting this done for the people who need it in Montana."

Joan Alker, Exeutive Director of Georgetown University’s Center for Children and Families says that so far, every state that has asked for a Medicaid expansion waiver has been able to negotiate an agreement that both the states and federal government signed off on.

"For the Obama administration, they are obviously very interested in getting to yes on this. They’d like more states to accept the federal dollars and close the coverage gap. And so, they're very eager to get to yes, and in fact, they are six for six with states coming in to negotiate these kinds of Medicaid waiver proposals in the last two years."

Montana’s Medicaid expansion waiver is now open for public comment for 60 days. The federal government has no specific timeline for when it will respond, but once it does, there’s another 30 day comment period. Both sides would like to see the process go smoothly and quickly, so that people in Montana who are newly eligible for expanded Medicaid benefits can start getting benefits by the first of the year.