Missoulian Editorial: Busting 5 myths about Medicaid expansion

Unfortunately, the draft language of Buttrey’s bill hints that some persistent myths about Medicaid expansion are lingering in the Legislature, despite Montana’s clear success with the program since its implementation and recent reports that blow apart some of the worst misconceptions.

Here are five stubborn myths about Medicaid expansion that Montana’s legislators — and their constituents — ought to dispel right away, so that future discussions can be based on good information and proven facts.

***

Myth: If Medicaid expansion fails, enrollees will have to go out and get jobs.

Fact: Most people covered by Medicaid are already employed. The Montana Department of Labor and Industry, in a report released Jan. 8, found that 7 out of 10 Medicaid enrollees are working, and among those not working, 1 in 3 are ill or disabled. In 2017, this amounted to more than 80,000 individuals in Montana who were both employed and enrolled in Medicaid. The remaining population either worked out of their homes, were in school or were the primary caregiver for a family member.

In fact, only a scant 4 percent of Medicaid participants were unemployed for unknown reasons.

Myth: People on Medicaid are just lazy and don’t want to work.

Fact: The reality is that employment does not guarantee health coverage. Many Montana workers are either self-employed and unable to afford health insurance, work for an employer that does not provide health insurance, or work part-time and don’t qualify for full benefits. In fact, many Montanans work multiple part-time jobs in order to make ends meet. Another Department of Labor and Industry report calculated that “the average job in Montana had a work week of only 32.8 hours in 2014 — the shortest work week in the nation.”

To qualify for Medicaid expansion, an individual must earn less than 138 of the federal poverty level, which is $15,418 a year. For a family of four, it’s $25,100.

The current version of Buttrey’s bill proposes to require enrollees to report at least 80 hours of work each month. Those who can’t work would be required to show they are actively seeking a job, enrolled at a university, receiving job training, or participating in treatment or counseling. The hour requirement could also be met through volunteer work.

Myth: People on Medicaid have no incentive to get a job. Enrollment discourages participants from working.

Fact: Montana’s voluntary job services program for Medicaid expansion enrollees, HELP-Link, is directly responsible for helping 78 percent of unemployed participants secure a job or find a better-paying job. The Montana Healthcare Foundation commissioned a report last year that tracked the more than 22,000 enrollees who signed up for employment assistance through the state’s unique job assistance program, and discovered that about 72 percent of program participants increased their average wages by $1,680 annually.

An earlier report from the Montana Healthcare Foundation showed that overall labor force participation among Medicaid expansion enrollees increased by 8.5 percent, even as the national participation rate dropped by 2.5 percent.

Myth: Medicaid expansion is bad for small businesses.

Fact: Medicaid expansion lifts the burden of providing expensive health insurance from small-business owners. The Montana Department of Labor and Industry’s report from this month shows that more than half of private businesses in the state — some 18,000 businesses — employ at least one worker who is enrolled in Medicaid expansion.

Larger businesses (those with more than 50 employees) benefit even more: 98 percent of these businesses employ at least one worker receiving Medicaid. But the benefit to small businesses is clear. The report notes that privately insuring all the workers covered by Medicaid expansion would have cost at least $354 million.

The numbers hold across the state, with at least 30 percent of businesses in every county counting at least one Medicaid expansion participant. And these businesses saved significant amounts of money. Private employer-based insurance coverage in Montana averages about $5,600 — per employee. On the other hand, employers who have employees enrolled in Medicaid expansion pay an average $630 per employee in income taxes.

Myth: Medicaid expansion creates a drag on the economy.

Fact: Medicaid expansion supports thousands of jobs and hundreds of millions in personal income in Montana. A report by the Bureau of Business and Economic Research at the University of Montana linked Medicaid expansion to 5,000 jobs and nearly $300 million in personal income. The latest analysis from the Montana Healthcare Foundation put the numbers even higher, projecting that by 2020, Medicaid expansion will contribute to 6,000 new jobs and $350,000 in personal income. The state economy benefits from Medicaid expansion to the tune of more than $600 million a year.

The cost to the state, meanwhile, is about $57.4 million a year, about $28.4 million of which is offset through savings generated by moving Medicaid enrollees from the regular plan to the expansion program, because the federal government pays a higher rate for expansion participants.

Buttrey’s bill proposes to further reduce the state’s share of the cost by expanding a tax on health insurance companies, taxing certain religious groups that had previously been exempt, and raising premiums paid by Medicaid enrollees. Yes, enrollees do pay a premium — about 2 percent of their total incomes, an average of about $26 per month.

***

Regardless of which bill ultimately finds its way to Gov. Steve Bullock’s desk for signing, the most important thing is that Montana continues this vital program that allows nearly 95,000 of our fellow Montanans to receive basic health care.

However, legislators must also make sure that the program continues to cover those who need it most, without putting up onerous barriers that only add to the state bureaucracy and keep people with legitimate needs from participating.