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UM economist says taking federal Medicaid expansion money a good deal

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Bryce Ward, Bryce Ward, director of health care research at the Univeristy of Montana's Bureau of Business and Economic Research, discusses the economics of Medicaid expansion during the Montana Healthcare Forum on Monday in Helena.

HELENA – Accepting federal money to expand Medicaid to cover thousands of low-income Montana looks like a good financial and policy deal for the state, a University of Montana economist told a health care conference here Monday.

“To the extent that you’re going to leave $200 million to $1 billion a year in Washington?” said Bryce Ward, director of health care research at UM’s Bureau of Business and Economic Research. “It seems like that would be something you’d want to get back.”

But whether Montana accepts that money remains a sticky political issue in the Republican-controlled Legislature, others said – and one that will require some compromise to solve.

“It’s going to come down to whether we’re willing to accept those federal funds,” said Sen. Ed Buttrey, R-Great Falls. “We have to find something that’s acceptable to all parties ... and that’s going to be the challenge.”

Buttrey said he’s willing to consider accepting the funds, if it can be done in a way that reforms the medical system and requires beneficiaries to contribute in some way to their care.

House Minority Leader Chuck Hunter, D-Helena, who sponsored an unsuccessful Medicaid expansion bill in 2013, also said he doubts a bill to expand the government-financed care will pass unless it somehow involves the private sector.

Buttrey, Hunter and Ward spoke at the annual Montana Healthcare Forum in Helena, which is attended by health care industry officials, state lawmakers and other policymakers.

The forum covered a variety of health care issues, but most of the talk centered on Medicaid, and whether the 2015 Legislature will vote to accept millions of dollars in federal money to expand it to cover anywhere from 35,000 to 70,000 low-income Montanans.

As part of the 2010 federal health care overhaul, Congress agreed to pay to expand Medicaid to provide free health coverage to everyone earning up to 138 percent of the federal poverty level, or $16,100 for a single person.

But states must authorize the expansion and pay a small portion of the costs starting in 2017.

The 2013 Montana Legislature rejected the expansion and most Republican leaders of the 2015 Legislature are saying again they oppose it.

Democratic Gov. Steve Bullock last month proposed an expansion plan that would accept the federal money and hire a private company to administer the claims and other aspects of the plan.

Tara Veazey, the governor’s health care policy adviser, told the forum Monday that Bullock tried to design a “truly unique Montana solution” that considered concerns on both sides of the issue.

The federal money will help provide health care to thousands of Montanans who need it, boost the bottom line for rural hospitals and bring back to the state “billions of dollars in federal funds that Montana taxpayers are already paying,” she said.

Ward, the UM economist, said expanding Medicaid would have several positive economic effects on the state, such as reducing the number of people without health insurance, and thus reducing medical debt, and increasing revenue for physicians, hospitals and other medical providers.

Money the state spends to match the federal money ends up paying for itself in economic benefits, he said. By 2020, the state is supposed to pay no more than 10 percent of the expansion costs.

“It’s the same if a factory came here and said, `We’d like to locate here and create jobs’ ... and asks for a tax break,” Ward said. “Many states would say yes.”

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