As Nicholas Terry wrote in his recent blog post, the 2018 midterm elections produced some big wins for Medicaid. Voters in Idaho, Nebraska and Utah decided to expand Medicaid coverage under the ACA. These states followed the lead of Maine, where Medicaid was expanded by ballot initiative in November of 2017.
One exception to this trend is Montana. On November 6, Montanans rejected I-185, a ballot initiative proposing to fund the state’s Medicaid expansion through a tobacco tax. The ballot initiative would have removed a sunset provision that automatically terminates funding for the expansion in 2019. The outcome of the initiative has not necessarily killed Montana’s expanded program. The Republican legislature may still act to appropriate funding for the program, and—given that the expansion was originally passed with bipartisan support in the state legislature—this route to securing financing is not foreclosed. In August, the oversight committee in charge of the expansion bill recommended that the state fund the program regardless of the outcome of the ballot initiative.
However, even if the future of the Montana expansion remains unclear, there are still some important immediate takeaways from the result of I-185.
- As this NPR article notes, Montana would be the first state to reverse its state Medicaid program after enactment. Public benefits programs are rarely reversed after enactment (the Medicare Catastrophic Care Coverage Act provides a rare counterexample), and the result in Montana would thus stand as a significant outlier.
- Another clear takeaway from the results of I-185 is the power of special interest financing in shaping the outcomes of ballot initiatives. Tobacco companies spent more than $17 million dollars to defeat the measure, making it the most expensive ballot initiative race in the state’s history. But while the proposed tobacco tax drew massive amounts of opposition money, there are good reasons to employ a tobacco tax to fund a public program like a Medicaid expansion. Surveys suggest that both smokers and non-smokers are more likely to support tobacco taxes that fund healthcare programs.
- Finally, Montana belongs to a growing list of states that are seeking to budget for Medicaid expansions through new and often-untested ways. A series of states have opted to impose work requirements and to curb the costs of their programs, in spite of evidence that such requirements will not actually reduce public costs. These initiatives appear increasingly unnecessary, however, in light of evidence that state Medicaid expansions often promise to pay for themselves. In Montana, a report showed that the expansion promised to pay for itself in the long term by increasing economic activity and reducing spending elsewhere in the state’s budget. Similarly, a study of the Michigan expansion showed that the program would likely be cost-neutral by 2021. The notion that supplementary taxes or cost-cutting measures must be implemented in order to maintain expansions is undercut by growing evidence that these programs need not come at extra cost.
