Idaho Medicaid stabilizes, but changes coming

January 15, 2013 3:22 p.m. - Updated: 3:24 p.m.

BOISE – After years of relentless growth, Idaho lawmakers received a budget request for the state’s Medicaid program Tuesday that’s nearly flat in state funds, and just a 7.6 percent increase overall - even though the program is expected to add roughly 70,000 new recipients next year due to changes in federal laws.

“I think you will find that we are not asking for anything we don’t need,” state Health and Welfare Director Dick Armstrong told the Idaho Legislature’s joint budget committee.

The slower growth is mainly because Idaho’s caseload numbers in the health care program for the poor and disabled have stopped climbing so quickly as the state’s come out of the recession; it’s also because federal funds are up, meaning the state can spend less. Idaho’s federal matching rate for next year is going up, to the tune of $11.8 million.

It also in part reflects an overfunding of the program last year, when more growth was anticipated than actually came through. That prompted the program to turn back $46 million to the state general fund unused; officials say a new claims system is now allowing more accurate forecasts.

Sen. Shawn Keough, R-Sandpoint, vice-chair of the Joint Finance-Appropriations Committee, welcomed the slowing in the program’s growth, but cautioned, “The devil’s always in the details.” She said, “My focus tends to be less on the numbers, and more on the delivery of services to those who need it.”

Keough said lawmakers are just beginning the journey of deciding how to fund the mammoth program next year; after Tuesday’s budget hearing, they’ll work on proposed spending plans and won’t set the agency’s budget until at least mid-February.

Idaho’s Medicaid program adds up to a total of $2.06 billion, between state and federal funds, Medicaid division administrator Paul Leary told legislative budget writers Tuesday morning. It takes up 81.4 percent of the Department of Health and Welfare budget, the state’s largest department.

But 96.4 percent of the total Medicaid budget goes to payments to health care providers. “These are services provided to our participants by community providers,” Leary said. Only 0.7 percent of the total goes to personnel, and 2.9 percent to operating expenses.

For next year, Gov. Butch Otter is recommending $476.7 million in state general funds for Medicaid, which is nearly flat - just a 0.5 percent increase from this year. Total funds, at $2.0667 billion, reflect a 7.6 percent increase, largely because of increased federal funds.

Like all states, Idaho has the option of expanding its Medicaid program to serve more of the state’s uninsured, largely at federal expense, but for now, Otter has recommended holding off for a year and studying how to improve the program first.

However, even without that expansion, the federal health care reform law requires a series of changes next year that will add tens of thousands to Idaho’s program – and bring a 30 percent increase in case load.

“We are now gearing up, we are all hands on deck, to prepare for this huge increase of medically eligible participants,” Armstrong said, now estimated at about 70,000 Idahoans.

That’ll happen for two reasons. First, there’s a new MAGI, or Modified Adjusted Gross Income, calculation for determining eligibility. That alone will result in about 25,000 more Idahoans qualifying for Medicaid next year. Another 10,000 children who are now on the Children’s Health Insurance Program, or CHIP, also will become eligible for Medicaid, and will be switched over.

JFAC Co-Chair Rep. Maxine Bell, R-Jerome, commented acidly, “I’m a little troubled by the acronym MAGI - I don’t exactly see the gold in there or the gifting of it.”

The second boost to Idaho’s Medicaid enrollment numbers is expected to come from what federal officials call the “woodwork” effect: Once all Americans are required to purchase health insurance, and they go online to exchanges to see which subsidies or benefits they might qualify for, many will discover they actually already are qualified to receive Medicaid, but have never signed up.

Idaho’s expecting to get about 35,000 more signups for Medicaid from that “woodwork” effect.

Idaho’s Medicaid program currently serves about 233,000 people; 63 percent of them are children, but they account for only 19 percent of the costs. Smaller numbers of patients who are disabled or seriously ill account for most of the program’s costs. In 2002, just under 142,000 Idahoans were on the program.

Keough, who chaired the Legislature’s economic outlook committee this year, said she’s hopeful that the drop in Medicaid growth signals the same thing business representatives who testified to that panel reported: “That the economy might be trending up.”


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