Montana will soontestwhether cash-strapped and strained state health departments cancarry outfederal Medicaid work requirements without ending coverage for eligible adults.
On July 1, Montana plans to become the second state after Nebraska to make Medicaid enrollees provethey’reworking to keep their coverage.That’ssix months ahead of the federal deadline for states to implement Medicaid work rules for millions of enrollees.
That date is also the start of a new state budget year, as well as the deadline for Montana health officials to climb out ofa previousMedicaid-driven spending deficit. Montana lawmakers underfunded the health agency when they set the state budget last year — before congressional Republicans passed President Donald Trump’s One Big Beautiful Bill Act. Health policy analysts say the state’s budget crunch is a hint of the challenges to come nationwide.
That’sbecause the federal spending law requires states to check every six months whether millions of Medicaid enrollees work, go to school, or volunteer at least80 hoursa month, or qualify for an exemption. Those checks will take time and money. Simultaneously, the lawis expectedto reduce federal Medicaid spending — the largest pool of federal funding for states — bynearly$1 trillionover 10 years, shift more foodassistancecosts to states, and add tax breaks that could hit state budgets.
“States are the ones that aregonnahave to do the dirty work of implementing cuts,” said Joan Alker, a Georgetown University researcher focused on health coverage.
Part of Montana’s proposed budget fix is to stall rate increases for healthcare providers that were due July 1. Clinicians told me they already struggle to afford hiring staff amid growing waitlists for care, which they blame on low Medicaid payments.
Meanwhile, there aresomered flags in the state’s Medicaid data from recent years: People often face long waits to access publicassistance, andmanycan lose coverage at renewal time because of paperwork issues.
All these problems reflect a national challenge to connect people to care through strained publicassistanceprograms. Our reporting has long shown how states have struggled to process Medicaid applications.
“Our concern is, is the department ready?” Jean Branscum, CEO of the Montana Medical Association,said ofthestatehealth agency. “Does the capacity exist for all this to be done right and ensure that patients don’t pay the price?”
State officials have saidthey’llscan existing data to try to automatically confirm whether people meet the work rules. Andthey’vebeenbuilding uptheir publicassistanceteam for months.
Butthey’vehad to wait on unanswered questions from the federal government that are key to exempting especially vulnerable people from the incoming rules. And now,they’vegota lotmore work to do with less money.
The state is ramping up to implement the federal work requirements six months ahead of the deadline. But Montana is one of several states already struggling to pay for health services.