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Montana will soon test whether cash-strapped and strained state health departments can carry out federal 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 prove they鈥檙e working to keep their coverage. That鈥檚 six 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 of a previous Medicaid-driven spending deficit. Montana lawmakers underfunded the health agency when they set the state budget last year 鈥 before congressional Republicans passed President Donald Trump鈥檚 One Big Beautiful Bill Act. Health policy analysts say the state鈥檚 budget crunch is a hint of the challenges to come nationwide.
That鈥檚 because the federal spending law requires states to check every six months whether millions of Medicaid enrollees work, go to school, or volunteer at least 80 hours a month, or qualify for an exemption. Those checks will take time and money. Simultaneously, the law is expected to reduce federal Medicaid spending 鈥 the largest pool of federal funding for states 鈥 by nearly $1 trillion over 10 years, shift more food assistance costs to states, and add tax breaks that could hit state budgets.
鈥淪tates are the ones that are聽gonna聽have to do the dirty work of implementing cuts,鈥 said Joan Alker, a Georgetown University researcher focused on health coverage.聽聽
Part of Montana鈥檚 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 are some red flags in the state鈥檚 Medicaid data from recent years: People often face long waits to access public assistance, and many can lose coverage at renewal time because of paperwork issues.
All these problems reflect a national challenge to connect people to care through strained public assistance programs. Our reporting has long shown how states have struggled to process Medicaid applications.
鈥淥ur concern is, is the department ready?鈥 Jean Branscum, CEO of the Montana Medical Association, said of the state health agency. 鈥淒oes the capacity exist for all this to be done right and ensure that patients don鈥檛 pay the price?鈥
State officials have said they鈥檒l scan existing data to try to automatically confirm whether people meet the work rules. And they鈥檝e been building up their public assistance team for months.
But they鈥檝e had to wait on unanswered questions from the federal government that are key to exempting especially vulnerable people from the incoming rules. And now, they鈥檝e got a lot more 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.
