MT Medicaid Expansion Leads to More Preventive Care Use, Lower Costs

Since Montana’s Medicaid expansion policy went into effect in 2016, the program has seen strong results in its preventive care services utilization efforts and Medicaid spending, according to a report from Manatt Health.

“Medicaid coverage supported more than 60,000 wellness exams, and thousands of cancer screenings, preventive dental visits, and other preventive services,” Aaron Wernham, MD, chief executive officer of Montana Healthcare Foundation, said in the press release.

“In turn, we see declining ER use for common illnesses over years of enrollment. And this year, we also found lower inpatient and ER costs accompanied by higher use of outpatient care and pharmacy over the time people are enrolled in Medicaid. The program is doing exactly what it was designed to do.”

The state had 973 potentially averted cases of colon cancer in 2021 due to the strong turnout for cancer screenings. Additionally, over 5,550 individuals were screened for breast cancer that year, of whom 81 were diagnosed.

The results in preventive care spanned both physical and behavioral healthcare.

Over 2,100 new hypertension diagnoses and nearly 1,100 new diabetes diagnoses contributed to the 6,611 beneficiaries who received treatment for hypertension and 3,506 beneficiaries with diabetes who were treated. Meanwhile, nearly 34,160 individuals received mental healthcare treatment that year, along with 5,750 beneficiaries who received substance abuse care.

Medicaid expansion enrollees visited the emergency department less frequently the longer they stayed in enrolled in Medicaid, the report found. For enrollees with two years of coverage, slightly more than a quarter of Medicaid expansion enrollees had an emergency department visit in the first year of coverage. In the second year, this share dropped 11.9 percent.

This trend also proved accurate among Medicaid expansion enrollees with physical and behavioral health chronic diseases. Patients with diabetes, respiratory diseases, mental healthcare conditions, and substance use disorders saw fewer Medicaid expansion enrollees visit the emergency department.

On the lower end, Medicaid enrollees with diabetes saw emergency department visits drop by four percent in the first year of enrollment with no significant change the following year. Enrollees with substance use disorders saw the highest drop off in emergency department visits, seeing rates decline by eight percent in the first year and an additional two percent through the second year.

In addition to changes in preventive care service utilization and emergency department visits, Medicaid expansion enrollees saw shifts in cost. Their spending decreased over time, from $9,430 on average in the first year of enrollment to $9,161 on average in the third year of enrollment. The type of care utilization also changed, with a five percent increase in outpatient costs accompanied by a five percent decrease in inpatient and emergency costs.

As a result of these changes in the amount and type of healthcare spending, Medicaid expansion garnered over $27 million in savings for the state of Montana, the report found. Increased federal match rates due to Medicaid expansion adoption boosted savings.

Additionally, uncompensated care costs dropped for Montana hospitals after Medicaid expansion went into effect. In 2015, before Medicaid expansion, uncompensated care costs reached approximately $390 million. By 2021, those costs dropped to $208 million. Rural hospitals saw uncompensated care costs drop from $64 million in 2016 to $41 million in 2021.

The report also found that health equity and access to behavioral healthcare improved under Medicaid expansion. More American Indians accessed preventive care, mental healthcare, and substance use treatment in 2021 than in 2016. The decision to expand Medicaid also brought more federal funding to Indian Health Service and tribal healthcare facilities.

Like the rest of the US, Montana has seen an increase in behavioral healthcare conditions, such as anxiety and stress, mood disorders, and substance use disorders.

In 2022, the state received approval to expand its residential and inpatient substance use care benefits to help address this surge. Funding for substance use treatment rose to $24.30 million in 2021, an over $19 million increase since 2016, and the number of state-approved substance use provider service locations has dramatically increased.