ADEA State Update

Paying for Medicaid Expansion

(State Policy, Insurance, Medicare and Medicaid, ACA, Medicare and Medicaid Services, Tobacco) Permanent link   All Posts

Why would tobacco companies spend more than $9 million opposing a referendum in Montana that could extend Medicaid expansion in the state beyond a scheduled 2019 sunset? The referendum not only asks if voters want to extend the expansion beyond the sunset, but also asks tobacco users and the tobacco industry to provide the funding.

When the Affordable Care Act was initially implemented, the federal government bore 100% of costs associated with initial expansion. The share of federal funding, however, began to be reduced in 2016 and will eventually fall to 90% by 2020. As the federal share of funding is gradually reduced, Montana and other states are seeking creative ways to compensate for that reduction.

Most expansion states are using general funds to make up the shortfall, but 13 expansion states are seeking to make up the funding through a variety of other means, including additional taxes, fees or cuts to Medicaid.

Duggan Dental