Rural Health Policy Project

Report Finds Medicaid Expansion Has Made Huge Impact in Montana, Especially in Rural Areas

The Montana Healthcare Foundation hired consulting firm Manatt Health to conduct a comprehensive evaluation of the effects of the Montana legislature’s expansion of the Medicaid program.  This follows up the foundation’s 2021 report on Montana’s Medicaid program and Medicaid expansion. Combined, these reports lay out the background of Medicaid in Montana and the program’s reach, especially in rural areas and small towns.

Expansion has been a critical part of cutting Montana’s uninsured rate in half – and 65% of people on Medicaid in Montana live in rural areas. About 72% of Montana’s expansion enrollees are working, while the remainder of expansion enrollees are either ill (for example with cancer) or disabled, caretakers for another family member or in school. Many work in seasonal or low-wage industries as waiters, construction laborers, cooks, housekeepers, cashiers, retail salespersons, and hairdressers.

Overall, the foundation’s newest report found multiple positive effects from expansion in Montana:

  1. Use of the emergency room for health care declined sharply among Medicaid enrollees each year they were enrolled in the program, even among people with chronic health conditions. By their second year of enrollment in Medicaid expansion, the proportion of emergency department (ED) visits dropped by 14%.
  2. Expansion funding and other federal funding in state fiscal year 2021 provided higher match rates for existing Medicaid populations and replaced existing state spending with federal dollars. As a result, Montana had state budget savings of nearly $27 million in SFY 2021 resulting from expansion. In addition, Montana spent proportionally less of its state general fund to finance its Medicaid program compared to peer states.
  3. Approximately 60% of all businesses in Montana had at least one employee enrolled in Medicaid between 2018 and 2019. Two-thirds of Medicaid expansion enrollees participating in Montana’s Medicaid expansion workforce program, HELP-Link, found employment in 2020.
  4. Medicaid expansion is resulting in the early diagnosis and treatment of cancer, hypertension, and diabetes. Medicaid expansion enrollees continued to be screened for breast and colon cancer from 2018-2020, resulting in diagnosis and treatment. However, due to the pandemic, screening numbers declined in 2020.
  5. Medicaid expansion has reduced the financial burden of uncompensated care for hospitals in Montana. Since expansion, uncompensated care costs for hospitals in Montana have been cut in half and no rural hospitals in Montana have closed since expansion was implemented in 2016. This is remarkable given how many rural hospitals have closed nationwide over the last six years, especially in non-expansion states.
  6. Medicaid is an especially important source of health coverage for American Indian and Alaskan Native (AI/AN) populations, covering a higher proportion of AI/AN Montana residents. Medicaid expansion has helped cover an additional 16,000 AI/AN residents, providing more access to preventive services, mental health treatment, and substance use treatment. However, the use of preventive services declined in 2020 because of the pandemic.
  7. Medicaid expansion is providing critical support to rural areas of Montana. People in rural areas now have much improved access to behavioral health services and essential rural health care facilities have seen their costs decline by over 40%, putting them on a much stronger financial footing.

Medicaid expansion has significantly improved overall health services access, preventive health, and especially access to behavioral health services across Montana. The fiscal benefits of expansion have resulted in positive budget numbers for the state and greatly reduced costs for hospitals and many other health facilities, especially in rural areas. Neighboring non-expansion states like Wyoming and South Dakota can look to this report for a comprehensive analysis of how Medicaid expansion has affected a similar state.

Adam Searing is an Associate Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.