Montana's 60-Employee Gamble Won't Fix Its Medicaid Work Requirement Problem
Montana is a state of 1.1 million people scattered across nearly 150,000 square miles, making it the fourth-largest state by land mass and one of the most sparsely populated in the country. By all measurements, it does not operate the high-volume welfare programs on the scale of California, Texas, or even Illinois.
This background matters when evaluating the decision by Montana’s Department of Public Health and Human Services earlier this year to hire an additional 60 full-time employees, or FTEs to meet the new Medicaid participant work requirements. The state is one of the first to roll out these requirements, and there are already reports of beneficiary confusion about how to meet them. If they do not meet them, the penalty is simple: beneficiaries will lose their health insurance coverage.
In addition, there are the first ever meaningful penalties for SNAP error rates. For fiscal year 2025, Montana recorded an 8.86% SNAP payment error rate, according to the USDA's June 2026 release, and the One Big Beautiful Bill Act now imposes financial penalties on states that exceed a 6% threshold. Starting in 2027, Montana could owe as much as $16 million annually in SNAP penalties if its error rate does not improve. State officials, by their own account, are working urgently to bring the FY2026 rate down below that threshold.
While Montana’s governor and senior welfare officials’ urgency and prioritization of these issues are commendable, the same cannot be said about their approach.
The Fiscal Burden of Permanent Personnel
According to publicly available figures, Montana state government employees earn an average of approximately $50,000 per year in base salary. When benefits, pension contributions, and employer-side costs are factored in, the net cost per employee typically runs between 30 and 40% higher, putting the annual tab for 60 new full-time positions somewhere in the range of $3.9 million to $4.3 million. Their permanent, full-time status means they become a fixed addition to Montana’s payroll, a cost the state will be on the hook for each future year.
The addition of this fixed cost is particularly a problem because Montana is simultaneously absorbing a separate and significant budget shock. Under the new, also unprecedented, 25/75 federal-state administrative cost split for SNAP, which takes effect October 1, 2026, Montana's share of program administration costs will increase by roughly $6.2 million annually, compared to the prior long-time 50/50 arrangement.
While Montana’s decision to hire new employees to tackle the new challenge of Medicaid work requirements appears logical, for a state of Montana’s size, trading one long-term fixed cost for another defies financial good sense.
First, consider the size of Montana’s SNAP program. The state serves about one SNAP recipient for every 14 residents, across a dispersed rural geography where many county offices are separated by hundreds of miles. Its caseload of just under 80,000 a month pales in comparison to large states, some with with caseloads approaching five million.
If Montana were dealing with a large influx in population, then the decision to bring on sixty full-time staff in order to meet the increased caseload would be easier to defend. In actuality, the state is applying a permanent fix to a temporary implementation problem that will be a drag on the state’s budget for years to come.
Few examples better illustrate this than Massachusetts, a state that has carried some of the highest SNAP error rates in New England for the past two years. When the state finally got serious about addressing the issue, it elected to hire eighty new SNAP caseworkers. Yet, even after the employees were hired, Massachusetts was unable to bring the error rates under control, not on account of having too few employees, but instead due to the inadequate and archaic nature of the systems that they operated. As one former employee characterized it, “The systems aren't adequate for our numbers, so there's a backlog."
If Montana hopes to avoid making the same mistakes Massachusetts made, it must focus on the underlying systems responsible for most of the errors and not simply add new personnel to a broken process.
At the same time, automation should not entirely replace the welfare agencies’ workforce. At CAMI, we have long been firm believers of the need for a "human in the loop," a framework that relies on experienced caseworkers who can evaluate nuanced eligibility situations, catch edge cases that automated systems miss, and maintain the accountability that only human oversight provides.
The experience of Denver Human Services illustrates what happens when states lack sufficient case workers. Amid an ongoing struggle to fill 70 eligibility technician roles, the department processed less than half of its renewals on time in 2023. The staffing shortage left too few employees to sufficiently manage the work of outside contractors, let alone actually process applications and renewals. Ultimately, rather than leading to a more efficient operation, it gave way to one where nobody had a clear enough view of what the contractors were doing to effectively oversee their work,
The optimal approach sits somewhere in the middle. By equipping caseworkers with modern tools like real-time income verification, access to electronic income and other eligibility data, and the flexibility to bring in qualified private-sector partners, states will benefit from a leaner payroll while avoiding the millions in error-rate penalties that come from failing to strike this balance.
The Right Approach For Montana
As the state brings on dozens of new permanent roles to handle Medicaid work requirements, they must ask themselves some difficult questions. Namely, which of these sixty slots genuinely require full-time state employees? Will the new staff even be capable of tackling this challenge, or is it one that new systems and processes are better equipped to address? Where could a specialized private-sector partner deploy analytic tools to process cases more quickly and at a lower long-term cost than a permanent hire who takes years to reach full proficiency? The same applies to tackling Montana’s SNAP error rates, which can trigger SNAP benefit cost-sharing beginning on October 1, 2027.
The Treasure State doesn't need to choose between people and technology. It needs both, and needs them to be deployed strategically, with clear accountability and a "human in the loop."