Montana’s Republican-led Legislature and Governor are poised to extend the state’s Medicaid expansion beyond its planned summer expiration, despite looming uncertainties from Congress and the Trump administration. Lawmakers face a looming deadline before the May session ends to decide on extending the June 30 sunset date for the Medicaid program, covering approximately 76,000 adults. Given potential federal shifts, state legislators are evaluating their readiness for upcoming changes. This concern was highlighted by Republican state Rep. Jane Gillette in a recent budget subcommittee meeting on the Medicaid budget.
In the U.S. House, a budget bill aligns with President Donald Trump’s priorities, proposing $4.5 trillion to prolong tax cuts. Passed by the House Budget Committee on Feb. 13, the bill includes $880 billion in cuts over the next decade, affecting Medicaid. Discussions suggest possible federal work requirements and reduced federal cost contributions for Medicaid expansion.
Robin Rudowitz from KFF pointed out that states might face increased financial burdens, potentially needing to raise revenue or cut spending elsewhere to maintain Medicaid coverage levels. “There are no easy answers or options for states in these scenarios,” she said. In South Dakota, lawmakers are considering a bill prompting a voter decision on Medicaid expansion if federal contributions decline. Idaho is deliberating on repealing its expansion program unless federal authorities approve set limitations.
The Montana House passed a bill on Feb. 10 to make Medicaid expansion permanent, advancing further in the Senate by Feb. 20. Although Governor Greg Gianforte hasn’t declared his stance, he has previously expressed support for the program with strong work prerequisites. The budget subcommittee led by Rep. Gillette discussed the financial impacts and possible federal changes, focusing on the federal matching rate drop.
State Sen. Carl Glimm described a potential lower federal matching rate as “pretty low-hanging fruit,” though noting it requires congressional action. Currently, the federal government covers 90% of healthcare costs for eligible adults aged 19 to 64 without disabilities and incomes below 138% of the federal poverty level. In Montana, the federal match for traditional Medicaid groups will be about 62% in the upcoming fiscal year.
Montana spent nearly $1 billion on Medicaid expansion in 2024, with the state covering just under $100 million. If the federal contribution decreases by 10%, state costs would rise by about $100 million. A shift to a 38% state match would increase annual state expenditures by $280 million. Recent federal share changes have stemmed from events like COVID-19, noted by Republican Sen. Russ Tempel, emphasizing the unpredictability of such shifts.
State Sen. Jeremy Trebas emphasized aligning state policy with federal changes and advocated for Senate Bill 199, proposing stricter work requirements and eventual program termination if federal approval wasn’t granted. However, the bill failed on the Senate floor, rejected by all Democrats and a faction of Republicans. Despite this, Trebas expects HB 245 to pass, though he predicts faster-than-anticipated federal Medicaid alterations could necessitate a special legislative session in Montana.
Rep. Gillette, who opposed HB 245, suggested providing the Gianforte administration with varied options to adapt without further legislative intervention if federal changes occur before the Legislature reconvenes in 2027. Senate President Matt Regier suggested a bill on Feb. 15 to limit expansion to those under 100% of the poverty level and to permit spending restrictions or program improvements.
Sponsored by Rep. Ed Buttrey, HB 245 accommodates potential federal funding reductions by mandating increased premiums or additional state funds. Buttrey argues legislative decisions shouldn’t hinge on uncertain future federal policies, and any rapid federal Medicaid changes warrant prompt legislative action, given the program’s broad impact.
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