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MT: ‘Like Heroin’: Lawmakers worry about cost of Medicaid expansion after ‘free money’ goes away

By   /   June 29, 2012  /   News  /   1 Comment

Part of 22 in the series The Health Care Decision

State Sen. Dave Lewis says expanding Medicaid is like starting a heroin addiction.

By Dustin Hurst ǀ Watchdog.org

HELENA — Montana lawmakers who tried every which way to blunt the effect of President Barack Obama’s signature health reform must now decide if they want to enlarge the state’s Medicaid program.

Doing so could mean tens of millions in new federal revenue and coverage for about 70,000 state residents living without health insurance.

But it could also mean a long-term addiction to federal money, said state Sen. Dave Lewis, R-Helena.

“It’s like heroin,” Lewis told Watchdog.org Friday. “Once you buy in, you’re in.”

And as with most dealers, Congress is offering the first two years of free hits on the fiscal narcotic for free: In 2014 and 2015, the feds will cover all costs for new enrollees signing up under the new guidelines.

After that, federal funding descends over four years to 90 percent in 2019. After that, the funding split between the state and federal government is anyone’s guess.

Expansion of Medicaid will cover single adults earning up to 133 percent of poverty level annually, or about $14,500. About 70,000 Montanans will be eligible under the new guidelines, if adopted.

But the U.S. Supreme Court, in upholding the president’s health law in a 5-4 vote Thursday, killed the provision requiring states to comply with expansion. The feds threatened states’ total Medicaid funding if they didn’t comply, a revision rebuffed by the majority justices.

That’s a colossal victory for states’ rights and budgets, as the federal government pumps out billions to cover Medicaid’s shared costs.

For the 104,000 Montanans using the programs now, the state pays about 30 percent with the feds picking up the balance. It’s expected to cost $1.14 billion through 2012 and 2013.

If the federal government decides to relegate new enrollees to the standard 30-70 funding split, some projections show Montana might need more than $100 million annually to cover the new costs.

That figure doesn’t include standard caseload growth for those already using Medicaid services.

That funding descent scares Lewis and other state officials.

“Sure, it’s free for two years,” Lewis said, “but once you get onto it, you’re never get off of it.”

Lest anyone think this a partisan issue, Democratic Gov. Brian Schweitzer expressed deep reservations about the expansion and the hole it would blow in Montana’s budget.

Gov. Brian Schweitzer

“Here’s what I know,” Schweitzer Yes! magazine in February 2011, “that unless we challenge the underlying costs of health care … it will bankrupt the states because there’s no way of decreasing the cost of health care under the current system.”

Carl Graham, president of the Bozeman-based Montana Policy Institute, a free market think tank, said he realizes how powerful the free money argument will be for those looking to expand the program.

“It will be a very difficult argument to make,” Graham said of the fight against expanding. “In the short run, it’s free money.”

When lawmakers return to Helena next year, the decision to expand could rest with the party that occupies the governor’s mansion. Schweitzer is term-limited and Democratic Attorney General Steve Bullock and former GOP U.S. Rep Rick Hill are racing to take his place.

Neither candidate has said much on expansion, but Hill looks more likely to opt out. Though unreachable for comment Friday, Hill’s reaction to the Supreme Court ruling could shed light on how he could act.

Former Republican U.S. Rep. Rick Hill

“Obamacare is not the solution to our health care problems,” Hill told The Missoulian Thursday. “It’s bad legislation that Montanans don’t want and can’t afford. It does not address the principal problem, which is the rising cost of health care.”

Bullock was more reserved in his comments to The Missoulian, praising the court’s decision while simultaneously saying there needs to be more work to lower health costs generally.

The Montana Legislature is not afraid to buck federal law, even when free money is attached.

Another part of Obama’s health law calls for states to build online insurance purchase websites, but Montana Republicans declined. The federal government, which provided most states with generous grants to build their own insurance marketplace, is stepping in to build Montana’s website.

Part of 22 in the series The Health Care Decision