State lawmakers don’t have the luxury of waiting until the federal picture sharpens. They must decide before the session ends in early May whether to lift a June 30 sunset date for the expansion program, which covers about 76,000 adults.

However, the likelihood that significant changes lie ahead for the joint federal-state Medicaid program has spurred discussion of whether legislators should — or can — prepare for what may be coming. That’s the challenge for lawmakers this session, said Republican state Rep. Jane Gillette during a recent meeting of the budget subcommittee she chairs that works on the Medicaid budget.

“What are the different options we have for bracing ourselves for that?” Gillette said.

The U.S. House is working on a budget bill to reflect President Donald Trump’s priorities, including allocating up to $4.5 trillion to extend tax cuts that would otherwise expire.

A plan passed by the House Budget Committee on Feb. 13 calls for $880 billion in cuts over the next 10 years for the committee that oversees, among other things, Medicaid spending. Ideas reportedly under discussion include federal work requirements for some Medicaid enrollees and a decrease in the share of costs the federal government pays for people covered by the expansion program.

Some of the proposals would shift significant costs to the states, noted Robin Rudowitz, a vice president and the director of the Program on Medicaid and the Uninsured at KFF, a health information nonprofit that includes ºÚÁϳԹÏÍø News. If that happens, states will need to raise revenue or cut spending elsewhere to continue the same level of Medicaid coverage, she said.

There are “no easy answers or options for states in these scenarios,” she said.

Some states are debating how to prepare for possible federal changes. The South Dakota Legislature is that would ask voters whether to continue Medicaid expansion if the federal share drops. A outright has been introduced but not heard, while of several limitations on Feb. 19. Montana and eight other states have trigger laws that could end their expansion programs if the federal contribution rate drops.

The GOP-controlled Montana House of Representatives easily passed a bill to make the Medicaid expansion program permanent on Feb. 10 by a 63-37 vote. Then on Feb. 20, House Bill 245 passed the first of two votes required for Senate approval. Gov. Greg Gianforte has not publicly said whether he would sign the bill, but he previously said he believes the expansion program should continue if strong work requirements are in place.

In late January, the budget subcommittee that Gillette chairs was reviewing Medicaid expansion’s financial implications when talk quickly turned to the possible federal changes, particularly a drop in the federal matching rate.

Republican state Sen. Carl Glimm noted that observers have called a lower federal matching rate “pretty low-hanging fruit.” The change would require congressional action, though, and members noted that could take time.

The federal government pays 90% of the health care costs of expansion enrollees. That group is made up of adults ages 19 to 64 without disabilities and who have annual incomes at or below 138% of the federal poverty level, or $21,597 for an individual.

Until the federal Affordable Care Act allowed states to extend Medicaid to this group, the program was generally limited to low-income children, pregnant women, and adults who are blind, disabled, or at least 65. The federal match for those groups in Montana will be about 62% in the next state fiscal year, which begins in July.

The state spent nearly $1 billion on Medicaid expansion in 2024, with its share of the costs totaling just under $100 million. Budget committee staff said a 10% reduction in the federal share would add roughly $100 million in state costs. If the state’s share goes from 10% to the regular state match of 38%, the state would pay about $280 million more a year for expansion.

Subcommittee member Russ Tempel, a Republican senator, noted that the federal share changed in the past due to unexpected events, such as covid-19.

“Something’s going to happen that’s unpredictable,” he said. “It’s happened before, and it’s going to happen again, so we’re kind of a little bit shooting in the dark.”

But Republican Sen. Jeremy Trebas focused on the likely federal changes when urging senators to support his bill to tighten the work requirements in current law and, if federal approval were denied, eventually end the program.

“We should match up our state policy to coming federal policy so that we’re not caught off guard and expectations aren’t radically altered by what the federal government does,” he said during a committee hearing on Senate Bill 199.

The bill died last week on the Senate floor when all Democrats voted against it, along with a block of nine Republicans who have broken with their party on other issues this session. Roughly the same coalition also killed a bill by Glimm that would have phased out the expansion.

Trebas said recently he expects HB 245 to pass but also believes that federal Medicaid changes could happen more quickly than some think possible, forcing a special Montana legislative session to adjust to those changes.

Gillette, who voted against HB 245, said in a recent interview that the legislature should provide the Gianforte administration with a range of options to allow it to “course correct” without further legislative involvement if Medicaid expansion continues and federal changes come down before the legislature meets again in 2027.

State Senate President Matt Regier Feb. 15 to limit the expansion population to people below 100% of the federal poverty level and to give the state health agency the ability to limit spending or improve program integrity.

Regier’s bill also would make the expansion program contingent on the federal government approving a “community engagement” waiver, which includes work requirements, and it calls for lawmakers to vote on whether to hold a special session if the federal Medicaid matching rate drops more than three months before the next regular session.

But HB 245 sponsor Rep. Ed Buttrey, another Republican, said in a recent interview that takes care of any future decrease in federal support by requiring either the state to increase premiums for the program or the legislature to appropriate additional funds if the program is to continue.

Buttrey also said the legislature can’t make decisions now based on what federal law might be in the future. He said it’s unlikely that federal Medicaid policy would change quickly, but that if it did, the program affects such a large percentage of the state’s population that a special session would be warranted.

“I can’t think of one that’s more important than that,” he said.

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The changes, backers say, would fill gaps in services and help people better prepare for life outside of the locked, secure setting of the two state facilities before they reenter their own communities.

“I think part of the theme is responsibly moving people in and out of the state facilities so that we create capacity and have people in the appropriate places,” state Sen. Dave Fern (D-Whitefish) said of the proposed capital projects during a recent interview.

Fern served on the Behavioral Health System for Future Generations Commission, a panel created by a 2023 law to suggest how to spend $300 million to revamp the system. The law set aside the $300 million for improving state services for people with mental illness, substance abuse disorders, and developmental disabilities.

Gianforte’s proposed budget for the next two years would spend about $100 million of that fund on 10 other recommendations from the commission. The capital projects are separate ideas for using up to $32.5 million of the $75 million earmarked within the $300 million pool of funds for building new infrastructure or remodeling existing buildings.

The state Department of Public Health and Human Services and consultants for the behavioral health commission presented commission members with areas for capital investments in October. In December, the commission authorized state health department director Charlie Brereton to recommend the following projects to Gianforte:

• Move the 12-bed Intensive Behavior Center for people with developmental disabilities out of Boulder, possibly to either Helena or Butte, at an estimated cost of up to $13.3 million.
• Establish a “step-down” facility of about 16 beds, possibly on the campus of Shodair Children’s Hospital in Helena, to serve adults who have been committed to the Montana State Hospital but no longer need the hospital’s intensive psychiatric services.
• Invest $19.2 million to upgrade the Montana State Hospital’s infrastructure and buildings at Warm Springs, on top of nearly $16 million appropriated in 2023 for renovations already underway there in an effort to regain federal certification of the facility.

The state Architecture & Engineering Division is reviewing the health department’s cost estimates and developing a timeline for the projects so the information can be sent to the governor. Gianforte ultimately must approve the projects.

Health department officials have said they plan to take the proposals to legislative committees as needed. “With Commission recommendation and approval from the governor, the Department believes that it has the authority to proceed with capital project expenditures but must secure additional authority from the Legislature to fund operations into future biennia,” said department spokesperson Jon Ebelt.

The department outlined its facility plans to the legislature’s health and human services budget subcommittee on Jan. 22 as part of a larger presentation on the commission’s work and the 10 noncapital proposals in the governor’s budget. Time limits prevented in-depth discussion and public comment on the facility-related ideas.

One change the commission didn’t consider: moving the Montana State Hospital to a more populated area from its rural and relatively remote location near Anaconda, in southwestern Montana, in an attempt to alleviate staffing shortages.

“The administration is committed to continuing to invest in MSH as it exists today,” Brereton told the commission in October, referring to the Montana State Hospital.

The hospital provides treatment to people with mental illness who have been committed to the state’s custody through a civil or criminal proceeding. It’s been beset by problems, including the loss of federal Medicaid and Medicare funding due to decertification by the federal government in April 2022, staffing issues that have led to high use of expensive traveling health care providers, and turnover in leadership.

State Sen. Chris Pope (D-Bozeman) was vice chair of a separate committee that met between the 2023 and 2025 legislative sessions and monitored progress toward a 2023 legislative mandate to transition patients with dementia out of the state hospital. He agreed in a recent interview that improving — not moving — MSH is a top priority for the system right now.

“Right now, we have an institution that is failing and needs to be brought back into the modern age, where it is located right now,” he said after ticking off a list of challenges facing the hospital.

State Sen. John Esp (R-Big Timber) also noted at the October commission meeting that moving the hospital was likely to run into resistance in any community considered for a new facility.

Fern, the Whitefish senator, questioned in October whether similar concerns might exist for moving the Intensive Behavior Center out of Boulder. For more than 130 years, the town 30 miles south of Helena has been home, in one form or another, to a state facility for people with developmental disabilities. But Brereton said he believes relocation could succeed with community and stakeholder involvement.

The 12-bed center in Boulder serves people who have been committed by a court because their behaviors pose an immediate risk of serious harm to themselves or others. It’s the last residential building for people with developmental disabilities on the campus of the former Montana Developmental Center, which the legislature voted in 2015 to close.

Drew Smith, a consultant with the firm Alvarez & Marsal, told the commission in October that moving the facility from the town of 1,300 to a bigger city such as Helena or Butte would provide access to a larger labor pool, possibly allow a more homelike setting for residents, and open more opportunities for residents to interact with the community and develop skills for returning to their own communities.

Ideally, Brereton said, the center would be colocated with a new facility included in the governor’s proposed budget, for crisis stabilization services to people with developmental disabilities who are experiencing significant behavioral health issues.

Meanwhile, the proposed subacute facility with up to 16 beds for state hospital patients would provide a still secure but less structured setting for people who no longer need intensive treatment at Warm Springs but aren’t yet ready to be discharged from the hospital’s care. Brereton told the commission in October the facility would essentially serve as a less restrictive “extension” of the state hospital. He also said the agency would like to contract with a company to staff the subacute facility.

Health department officials don’t expect the new facility to involve any construction costs. Brereton has said the agency believes an existing building on the Shodair campus would be a good spot for it.

The state began leasing the building Nov. 1 for use by about 20 state hospital patients displaced by the current remodeling at Warm Springs — a different purpose than the proposed subacute facility.

Shodair CEO Craig Aasved said Shodair hasn’t committed to having the state permanently use the building as the step-down facility envisioned by the agency and the commission.

But Brereton said the option is attractive to the health department now that the building has been set up and licensed to serve adults.

“It seems like a natural place to start,” he told the commission in December, “and we don’t mind that it’s in our backyard here in Helena.”

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In recent interviews, legislative leaders predicted a vigorous debate over keeping the Medicaid expansion program, which pays the medical bills of more than 75,000 low-income Montanans at an annual cost of about $1 billion to the federal and state governments. They also expect the topic to seep into other health policy decisions, such as the approval of new spending on Montana’s behavioral health system and regulation of hospital tax-exempt status.

“It all kind of links together,” said state Sen. Dennis Lenz, a Billings Republican and the chair of the Senate Public Health, Welfare, and Safety Committee.

Legislators from both parties also expect lawmakers from the GOP majority to continue to pursue abortion restrictions, despite a November statewide vote making abortion a right under the Montana Constitution.

The Medicaid expansion debate, however, looms largest among the health care topics.

“This is definitely the elephant in the room, so to speak,” said Senate Minority Leader Pat Flowers, a Belgrade Democrat.

Montana expanded Medicaid, initially for four years, in 2015, through a coalition of minority Democrats, some moderate Republicans, and a Democratic governor. A similar coalition renewed the program in 2019, but at the last moment, Senate Republicans tacked on an end date of June 30, 2025. That put the matter in the lap of this year’s legislature.

Republicans still hold strong majorities in the state House and Senate, whose leaders voiced concerns about the expansion program.

This time around, the governor — Greg Gianforte — is a Republican. Last year, the Gianforte administration completed a postpandemic eligibility reassessment that cut the number of expansion enrollees from a high of 125,000 people in April and May 2023 to approximately 76,600 people as of October, the most recent data available.

Gianforte has included funding for Medicaid expansion in his proposed budget, which must be approved by the legislature to take effect. His office said he wants “strong work requirements for able-bodied adults without dependents” to take part in the program. Spokesperson Kaitlin Price said the governor “has been clear that the safety net of Medicaid should be there for those who truly need it, but that it will collapse if all are allowed to climb on it.”

GOP legislative leaders clearly are skeptical of the program, saying it won’t continue without some “sideboards,” or additional requirements of enrollees and providers.

Whether any expansion bill passes “will depend on the people pushing it,” said Senate President Matt Regier, a Kalispell Republican who opposes expansion. “If there is no give-and-take, it could be an interesting vote.”

Flowers said he knows getting Medicaid expansion through the Senate will be tough. Republicans hold a 32-18 majority, and the GOP caucus leans conservative.

“There are a lot of my colleagues on the Republican side that are ideologically opposed, and I think you’re going to see that in their consistent voting against reauthorizing,” Flowers said.

Medicaid, funded by both the state and federal governments, provides health coverage for certain groups of low-income people. Expansion extended Medicaid coverage to nondisabled adults ages 19 to 64 with incomes up to 138% of the federal poverty level — about $20,800 a year for an individual in 2024.

The 2010 federal Affordable Care Act opened Medicaid to this new group of adults, starting in 2014. But a 2012 U.S. Supreme Court ruling said states could choose whether to adopt the change, and 40 have done so.

Republican state Rep. Ed Buttrey said he would sponsor a bill to reauthorize Medicaid expansion without an expiration date, but many GOP lawmakers remain unconvinced that expansion is needed, viewing it as a costly, unnecessary welfare program.

“I understand there are some pros to Medicaid expansion, but, as a conservative, I do have issues with — I guess I can’t get around it — socialized medicine,” said House Speaker Brandon Ler (R-Savage).

In September, representatives from a pair of conservative-funded think tanks made a case for ending Medicaid expansion, saying its enrollment and costs are bloated. The consulting firm Manatt, on the other hand, said more people have access to critical treatment because of Medicaid expansion.

At the least, it appears many Republicans want to require participants to work, pay premiums, or meet other conditions, if the program is to continue.

Premiums and work requirements are in Montana’s law right now. The Biden administration, though, nixed both, so they haven’t been in effect. Montana Republicans expect the incoming Trump administration to be more open to such provisions.

Democrats say Medicaid expansion has succeeded on many fronts: covering thousands of low-income workers, helping keep rural health care providers and hospitals afloat, and bringing hundreds of millions of federal dollars into Montana’s economy. The state pays 10% of the program’s costs, which totaled about $962.4 million in fiscal year 2024. The federal government picked up $870 million of that tab.

“With all that, it’s just stunning to me that there could be opposition,” Flowers said. “There is just no reason for us, collectively as a state, not to support this.”

Democrats will have their own expansion bill, brought by Rep. Mary Caferro of Helena. She said the bill would remove the work requirements and premiums, shine more light on the contracting activities of the state health department, and reopen some public assistance offices that have been closed. It also would make expansion permanent.

“We’re 10 years into this program,” said Rep. SJ Howell of Missoula, the Democratic vice chair of the House Human Services Committee, which debates health policy legislation. “I think that continuing a cycle of uncertainty for patients and providers doesn’t make sense.”

Legislators also see the expansion debate tying into other health care discussions.

Regier and Lenz said Montana’s nonprofit hospitals — strong supporters of expansion — have benefited greatly from the program and may need to give something back in return. One possibility: more government oversight of the “community benefits” that hospitals must provide to receive tax-exempt status.

They also noted that Montanans pay a fee for hospital stays to support the Medicaid program and that a fee on hospital outpatient revenue helps pay the costs of Medicaid expansion. Those fees and the resulting money raised for hospitals may merit review, they said.

Meanwhile, backers said Medicaid expansion underpins one of the governor’s major policy priorities, to improve the state’s behavioral health system. Gianforte has proposed spending up to $100 million over the next two years on 10 recommendations made by an advisory commission that reviewed the system for the past 18 months.

If Medicaid expansion ends, many adults would lose access to the mental health and addiction treatment system that Gianforte wants to improve, advocates said, while treatment providers would lose a significant source of revenue.

Money for the behavioral health changes would come, in part, from a $300 million fund created by the 2023 legislature. Lawmakers plan to scrutinize Gianforte’s proposals during the budgeting process. Howell said Democrats want to look at whether the changes would use enough of the $300 million fund quickly enough and on the most pressing needs.

Meanwhile, Republicans said they’ll likely introduce bills on abortion — even though Montanans approved Constitutional Initiative 128 by a 58-42 margin in November. CI-128 said the right to an abortion cannot be “denied or burdened” except by a “compelling government interest achieved by the least restrictive means.”

“It’s not going to slow us down in our pro-life positions,” Ler said of CI-128.

At a minimum, GOP leaders said, some of CI-128’s terms should be defined.

“With a very poorly written ballot initiative like that, we need to say, ‘What does that abortion industry look like under CI-128 and what’s our role as a state?’” Regier said.

But state Sen. Cora Neumann, a Bozeman Democrat on the Senate Public Health, Welfare, and Safety Committee, said the CI-128 vote provided a strong mandate for the right of privacy.

Enacting restrictions would lead to “that slippery slope of what’s next, if we allow legislators to rule on what’s happening in the doctor’s office,” she said. “What kind of can of worms could be opened to other invasions of privacy?”

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