The multi-million dollar hole in Idaho’s Medicaid budget

The Idaho Legislative session ended with an $8.5 to 12.3 million hole in the state’s Medicaid budget.

The Idaho Senate voted on the evening of March 19 to adjourn “sine die,” thus effectively ending the 2020 Legislative session despite the desire of many in the House to continue. This left several late-session bills dead on the floor, including House Bill 642, which would have funneled sales tax revenues from the state’s counties into Idaho’s Medicaid program.

This leaves at least $8.5 million in the state’s Medicaid budget with no designated revenue source for now. The Joint Finance and Appropriations Committee left that hole unfilled earlier in the legislative session when it set up the Medicaid budget on the assumption that a trailer bill would fill it with funds from other programs.

It is unclear what will happen now: whether Idaho can make up for the missing money out of the general fund or if health care providers will be stuck making up that difference if the state does not pay its Medicaid bills.

“Sticking (hospitals) with uncovered costs is a hit that could send them out of business,” Rep. Ilana Rubel, D-Boise, said during a Health and Welfare Committee meeting on March 16.

The House Health and Welfare Committee made multiple attempts to create a trailer bill to fill the hole. The first two bills failed in committee. A third scheme proposed by committee chair Rep. Fred Wood, R-Burley, also failed. Wood had proposed an alternate scheme to take money from the state’s seven public health districts and reallocate it to Medicaid expansion during the committee’s last gasp attempts to find funding.

Rubel remarked: “The timing could not be worse to defund (the districts) in the middle of a pandemic crisis.”

In a last-minute rally, the committee unanimously passed House Bill 642. Like it’s two predecessor bills, HB642 took funds from the county indigency programs and used them to pay for a part of Idaho’s Medicaid obligation mandated by the federal Affordable Care Act.

HB 642 made it to the House floor, where it languished waiting for its third and final reading; however, the Legislature adjourned before it ever got a hearing.

Idaho voters approved Medicaid expansion under the Affordable Care Act through a statewide ballot initiative in November 2018. The estimated cost of Medicaid expansion is $400 million, where 90% comes from the federal government and 10% from the state.

The county indigency program is funded entirely by the counties out of property taxes. It covers the first $11,000 of health care for those who can’t afford it. Under current law, counties are allowed to levy a 0.1% property tax to pay for the county indigent program. The state indigency programs currently cost approximately $20 million.

The state-funded Catastrophic Health Care Program kicks in after medical bills exceed $11,000. If a patient receives financial assistance from this program or the indigency programs, an automatic lien is placed on his or her real and personal property.

These two programs are the “payer of last resort” safety net for Idahoans who otherwise can’t afford medical treatment. These two programs are mostly superfluous now that Idaho has expanded Medicaid under the Affordable Care Act.

Out of the three failed bills to fill the Medicaid hole, HB 533 would have reallocated between $8.5 to $12 million from the counties to pay for part of Medicaid expansion. That would have covered between 22% to 30% of Idaho’s Medicaid expansion. HB 600, which died in committee with no debate, took $12 million from county indigency and catastrophic health care programs and then phased them out.

“I was stunned,” Health & Welfare committee member Rep. Mike Kingsley, R-Lewiston, was quoted on March 13 by the Lewiston Tribune when HB 600 failed without debate. “I was trying to decide which way to go. I wanted to hear (the debate).”

As a last-minute effort, the much simpler HB 642 cut eligibility for the county indigency programs and took the first 17.5% of the county revenue sharing monies for fiscal year 2021 for Medicaid expansion, which is approximately $12 million.

“We never could design a bill that makes everybody happy,” Wood said in committee on March 16.