Medicaid cuts may have a domino effect

Montana State Roundup

Published March 1, 2003  | March 2003 issue

Sometimes the cure is worse than the ailment. So warns a University of Montana study on state budget cuts to health care programs.

The study cautions the Legislature that state cuts in Medicaid would trigger losses in federal funding, and ultimately lost jobs in the health care fields.

Medicaid is a largely federally funded program. For every dollar Montana spends on Medicaid, the federal government contributes an additional $3 to $4. Last year that meant about $560 million in Medicaid spending in the state, which supports nearly 13,500 health care and related jobs worth $375 million in income. Most of the potential jobs losses would be in hospitals, nursing homes, medical labs and doctors' offices, but related businesses such as suppliers would also be affected by state funding cuts.

With even a 20 percent decrease in state funding of Medicaid, projections indicate that Billings would lose more than 400 health care and related jobs; Miles City, 404; and Butte, 539. On top of that, 15,000 more people have entered state Medicaid programs in the past two years, while the state has already nibbled away at Medicaid funds, including a January bite worth $13.3 million.

Kathy Cobb