Itís important to know where Montana tax dollars are going, especially when youíre asked to vote to raise taxes. Ballot Initiative 185 would raise tax revenues in Montana by $74 million per year. How that money is distributed, though, is even more problematic than the alarming price tag.
I-185 would bypass the Legislature to make the Medicaid Expansion program permanent. This expansion program, keep in mind, is different from Medicare and traditional Medicaid.
Medicare provides health insurance for adults 65 years and older as well as those younger than 65 with certain disabilities. On the other hand, traditional Medicaid is the healthcare safety net, providing insurance for those that are truly vulnerable. It includes coverage for low-income pregnant women, single parents, and individuals who are disabled.
Medicaid Expansion is quite different from these programs. Medicaid Expansion was created by the Affordable Care Act and allows individuals that donít qualify for traditional Medicaid to apply for government-subsidized healthcare.
Montana enacted Medicaid Expansion in 2015. Since then about 100,000 Montanans have enrolled in the program. More than 75% of these enrollees are working-age adults and more than half do not have children. The cost of Medicaid Expansion for Montana taxpayers is projected to be more than $60 million per year by Fiscal Year 2023.
Initiative 185 seeks to make Medicaid Expansion permanent and raise tobacco taxes to pay for it. Sounds simple, right? I thought so, too, before I dug into the fine print.
As it turns out, the revenue from this tax increase doesnít fully fund Medicaid Expansion. The language of the Initiative clearly states that no more than $26 million of the new revenue can be used to pay for Medicaid Expansion. If the cost of this program is $60 million and the tobacco tax increase only pays for $26 million, where does the additional $34 million come from?
It could come out of your pocket, even if you donít smoke.
I-185 is the wrong way to make Medicaid Expansion permanent. Montanaís Medicaid Expansion program is nearly twice as expensive as originally projected, but I-185 bypasses the Legislatureís plans to evaluate the program, allows the program to avoid much-needed cost controls and forces all Montana taxpayers to commit to funding the program year after year.
Due to this massive spending obligation, the Legislature could be forced to cut funding in other programs like schools, roads and infrastructure projects. If the Legislature doesnít cut funding in current programs we may be faced with additional increases in current tax rates.
So if I-185 caps Medicaid Expansion spending at $26 million but raises taxes on Montanans by $74 million, where does the rest of the money go? It turns out that more than half of I-185ís new revenues go to existing programs and the General Fund, a mega-million dollar blank check for politicians in Helena.
The proponents of I-185 can claim whatever they want, but Iím going to call it the way I see it: I-185 is just another tax increase. The latest attempt to make government even bigger.
Dan Bartel is a Republican member of the Montana House of Representatives representing District 29.