MTPR

I-185 Links Tobacco Taxes To Medicaid Expansion Funding

Apr 19, 2018

Montana’s Medicaid expansion program, which provides more than 93,000 people in the state health coverage, expires in just over a year. Campaigns are now underway to stop that from happening and to lobby support for the health care program.

Governor Steve Bullock is touring the state promoting the economic benefits of Medicaid expansion.

And on Thursday, a ballot initiative group hoping to increase taxes on tobacco products, to help pay for the state share of Medicaid expansion, kicked off its signature gathering campaign with a rally in downtown Helena.

Kristin Page-Nei with the American Cancer Society Cancer Action Network spoke at the event and helped write the ballot initiative language that was approved by the secretary of state on Monday.

“My organization supports increasing tobacco taxes frequently and significantly, because when you do that there is an significant increase in revenue, but it also decreases consumption,” she said.

I-185 backers include The Montana Hospital Association, Montana Medical Association, Montana Primary Care Association and the Montana Federation of Public employees, among other policy and health care advocacy groups.

They’ll need to gather more than 25,000 signatures for it to appear on ballots this November. If it passes, it would be the first voter approved increase on tobacco taxes in Montana in 13 years, and would increase the cost of a pack of cigarettes by $2.00, to $3.70.

Lawmakers in the 2017 legislative session rejected proposals to raise taxes on tobacco products as the state faced a budget shortfall.

Last week, an analysis by the University of Montana Bureau of Business and Economic Research found the state’s Medicaid expansion will pay for itself through savings in other parts of the state budget and increased economic activity. But, supporters of I-185 say that doesn’t mean that it’s free for the state to run the health care program.

“Medicaid expansion pays for itself in that it's long term cost savings, but we’re not going to see it immediately, so it’s really important for us to have real dollars that go towards that match,” Page-Nei said.

Montana currently pays 6 percent of the cost of Medicaid expansion in the state, with the federal government picking up the rest. By 2020, Montana’s share of the cost will increase to 10 percent and remain there.

A state government analysis says the ballot initiative could generate $74 million a year. That’s more than the $50 million Page-Nei’s organization expects.

“This funds a portion of the state match for Medicaid expansion, but it’s not completely funded by this tobacco tax increase, there will still have to be funds coming out of the state budget for it,” she said.

Page-Nei said if I-185 passes, funds raised would go to not just Medicaid expansion, but also veterans’ services, smoking prevention programs, and long-term care services for seniors and people with disabilities.

Medicaid expansion narrowly passed in 2015. And depending on the results of this ballot initiative lawmakers will likely have their own fingerprints on the program’s future when they reconvene in the 2019 session.

“And if the state can't afford it, the state can’t afford it,” Great Falls Republican Ed Buttrey said.

Buttrey sponsored the 2015 bill to expand Medicaid. In February, he told MTPR that a ballot initiative with a voter approved funding source for Medicaid expansion could help keep the program going.

“Now if you modify the plan in a citizen voter initiative, where you have pay-fors, specific in there to direct the Legislature to say ‘these parties shall pay for the program,’ and that passes, then I think that you’ve got a direction to the Legislature to say, look, they’ve told you how to pay for it, implement it in law, put it in the budget, away you go,” Buttrey said.

Along with the anticipated battle over the cost of reauthorizing Medicaid expansion, Republican lawmakers will likely look at tying renewal of the program to new requirements that the Trump administration is more friendly to than was the Obama White House. Those include requiring some Medicaid recipients work, making more recipients pay premiums, and making it easier for the state to drop recipients who don’t pay premiums.