Montana looks to fund small business insurance program

Success in tobacco-cessation programs has led to a problem with funding a state program to help small businesses insure their employees, just as the state works to expand that very program.

Gov. Steve Bullock and Auditor Monica Lindeen, the state commissioner of insurance and securities, say they support finding new funding for Insure Montana at the same time that Bullock is cutting the funding for the program that comes from the state tobacco tax revenues.

The issue came up last week during a legislative video conference, sponsored in Havre each week by Havre Public Schools and the Havre Area Chamber of Commerce, with Rep. Kris Hansen, R-Havre, saying from Helena that several Havre businesses had contacted her to urge support for continuing Insure Montana.

"That's an issue that's suddenly springing to the forefront, " she said.

The program has two main elements: It provides a purchasing pool for qualifying small businesses, and can provide a tax credit for small businesses that offer insurance for their employees.

Insure Montana was created in 2005 under the leadership of then-Gov. Brian Schweitzer and Auditor John Morrison.

Lindeen successfully pushed for an expansion of the program in the first year of her first term in office, 2009.

That has led to part of the problem.

The program has been funded entirely through tobacco tax revenues. As the program expands, and expenses from other mandatory programs funded through tax revenues including Medicare and Medicaid programs increase, not enough will remain to fund the Insure Montana program, Bullock spokesperson Judy Beck said last week.

Bullock is interested in finding ways to continue funding the program, she said.

"The governor is working with the commissioner and legislators to find sustainable ways to ensure that small businesses and their employees can afford health care insurance, " Beck said.

Different funding sources will be needed because Bullock's budget proposal does essentially the same action with Insure Montana as did Schweitzer's proposal for this Legislature, cutting this year's funding of nearly $10 million in half to $4.8 million in 2014, and eliminating it in 2015.

According to information from the governor's office, the state expects revenue of about $37 million a year from tobacco taxes. Even after removing the Insure Montana expense, the ending balance of the fund used for those programs will shrink from $11 million this year to less than $4 million in 2015, less than the original amount appropriated for Insure Montana when it was created in 2005.

Lucas Hamilton, Lindeen spokesperson, said the commissioner is committed to finding new funding.

"While there may be a time when Insure Montana is no longer needed, commissioner Lindeen believes it is inappropriate to cut Insure Montana in favor of the federal health insurance exchanges before we have some experience with those exchanges, " he said, adding that Montana voters laid the foundation for the program by approving an initiative in 2004 that increased tobacco taxes to pay for children's health insurance programs, Medicaid services and small business insurance assistance.

"Since then, Insure Montana has become wildly popular among Montana small businesses, and we currently have more than 300 employers on a wait list to join the program, " Hamilton said. "Until we know how the exchanges will look and operate, we can't know if they will be a suitable replacement for Montana's small businesses. For these reasons, commissioner Lindeen is working with the Legislature and the governor's office to restore funding through the biennium. "

He said a fair number of businesses in this region are using Insure Montana, more than 75 in Blaine, Chouteau, Hill and Liberty counties.

State Sen. Greg Jergeson, D-Chinook, said during last week's video conference that a Senate committee is looking to expand the program even more.

A hearing included discussion of expanding the program eligibility for businesses with two to nine employees to two to 25 employees, he said.

"There are arguments all over the place about where the money is coming from, " he said. "It all … goes into the general fund and comes out of the general fund, but it comes from a variety of different sources, and there are some folks arguing about that. Not as a problem with the program, but wading through the thicket of controversy over where the money has come from in the past and where it should come from in the future. "

Local businesses using Insure Montana:

Blaine County: Five participants

Chouteau County: 26 participants

Hill County: 37 participants

Liberty County: 17 participants