New work requirements could cause same problems for state
Darrell Ehrlick
(Daily Montanan) As Congress makes sweeping changes to the health insurance system and, in particular, the marketplace exchange, some healthcare leaders are concerned that the state and federal government isn’t quite prepared to roll out what Congress approved.
One of the largest concerns centers on the idea of “churn” — people who become eligible or not eligible, almost like a light switch turning off and on, because of administrative paperwork.
Montana already has “work” requirements, or exemptions for those on Medicaid. According to the most recent published study, 97% of those already meet the exemptions to qualify, according to “Medicaid in Montana,” an annual report that tracks the program’s usage in Montana, funded by the Montana Healthcare Foundation.
However, Montana’s experience with the “disenrollment” process is making some wonder if history is about to repeat itself — over and over again.
The concern centers on the amount of work the new legislation requires.
Now, not only are work requirements mandatory for much of Medicaid eligibility, those requirements force a whole new system of verification and paperwork. That paperwork and eligibility has to be documented and reviewed, mostly by state-level workers who “determine” a resident’s eligibility.
Montana’s Medicaid landscape changed dramatically two years ago when the Legislature opted to discontinue a policy of “continuous eligibility,” which ensured that if a person qualified for Medicaid coverage, they remained on it for a year, until it was time to redetermine if the person was still eligible.
As Montana rolled out its new verification and determination process, members of the public, healthcare officials and lawmakers were outraged at the Montana Department of Public Health and Human Services. As many as one-third of those enrolled had a lapse in healthcare coverage because of administrative issues, from missing documents to impossibly long wait-times where people would be left stranded on hold for hours.
Gradually, as state health department workers worked through redetermining the entire Medicaid population of Montana, which numbered, at the time, more than 120,000, officials caught up.
But now, with new work requirements, new documentation and verification that must happen at least twice a year, providers are worried that people who qualify for Medicaid coverage will lose it due to the same administrative challenges.
“These people if they’re working hard and low income, there is a lot of documentation to it,” said Dr. Aaron Wernham, CEO of Montana Healthcare Foundation. His organization has studied the effects of “redetermination” as it rolled out in Montana, but also spoken with other states.
“Documentation is hard and it requires a lot of the state. Each single case takes time,” Wernham said.
He said work-requirement programs in other states have had mixed results. For example, Wernham said that Georgia has experimented with it.
“It costs an enormous amount of money because of the verification. It’s very expensive,” Wernham said. “If you talk to a lot of clinics, what they’re really worried about is that people will just disappear.”
He said that means that many will likely become overwhelmed or frustrated with the process and just delay seeking medical care.
The Daily Montanan reached out to officials from the Montana Department of Public Health and Human Services on several occasions with questions about its capacity and processes given the new federal legislation. No official responded to those requests.
“We saw what happened when the state did it all at once,” said Montana Hospital Association CEO Ed Buttrey. Buttrey was a Republican member of the Montana Legislature through the 2025 session, and many of his colleagues on both sides of the political aisle were frustrated. “It’s not that bad now, but what happens when they start doing this every six months?”
Another looming reality
As officials are scrambling to figure out what the new determination and requirements will be for Medicaid going forward, the financial reality in Montana is even more severe, compared with larger or younger states.
“Many of those people are probably expected to drop their coverage before they have been priced out altogether,” said Cynthia Cox, the vice president of KFF Health for ACA Programs. “And those folks, the people who make more than four times poverty are disproportionately older adults, like pre-retirees or early retirees, they’re more likely to live in rural areas and they’re more likely to be small business owners.”
The state’s aging population means more and more healthcare institutions rely on Medicaid or Medicare. But that reliance puts a premium on two other areas — private-pay insurance or strictly managing “uncompensated,” or “charity” care, where a healthcare system doesn’t receive a full payment or any payment for services it provides.
Because the Centers for Medicare and Medicaid have lower reimbursement rates for doctors and hospitals, private insurance plans usually wind up subsidizing Medicare and Medicaid patients. However, because the state has such a high percentage of people who utilize the federal programs, the number of people considering not having health insurance is sky rocketing.
Cynthia Cox, the Vice President of KFF’s Program on the ACA, said the reality will begin in January, and once it begins, it will be a difficult trend to reverse.
“The Congressional Budget Office expect that eventually, 4 million people will become uninsured due to the expiration of these enhanced premium tax credits,” Cox said. “I would expect that to play out with a big drop in coverage Jan. 1 or so and then over a longer period of time, eventually adding up to 4 million. That’s going to happen in less than six months.”
That means there could be a resurgence of uncompensated care, which could lead to hospital closures. Nearly half of Montana is covered by either Medicaid or Medicare. According to the Montana Health Foundation, 22% of the state has Medicaid, while the federal government reports 20% are on Medicare.
“We have a handful of hospitals that are over 50% Medicaid and so even small shifts in revenue streams could be really detrimental,” said Katy Mack, the vice president of the Montana Hospital Association.
Some rural hospital margins are lower than one-half of one percent.
“We just don’t have the wiggle room to treat a patient without pay,” she said.