Idaho Senate passes Medicaid budget bill to fund new staffers, provider rate increases

The Idaho Senate on Tuesday passed a budget to fund $253 million in new spending for Idaho Medicaid, and take back nearly $278 million in unspent funds.  The Idaho Senate passed Senate Bill 1456 on a

24-11 vote. 

Idaho Republican lawmakers have criticized Idaho Medicaid’s ballooning budget, which has grown from less than $3 billion in fiscal year 2020 to around $4.7 billion next fiscal year,
if approved. 

Idaho senators debating the new spending budget bill Tuesday clashed over Idaho Medicaid’s increased spending. Idaho Medicaid’s budget for next fiscal year would be 0.6% higher than last year’s allocated budget. 

Idaho pays roughly 30% of the state’s Medicaid’s budget. The federal government pays the rest — roughly 70% of overall Medicaid costs.   “It’s a very frustrating budget to work on. This is a frustrating bill. I think we all have some sense of concern on this thing,” said Sen. Scott Grow, R-Eagle, co-chair of the Legislature’s powerful budget writing committee, the Joint Finance-Appropriations Committee, or JFAC. “However, I would draw your attention to the fact that we did all we could (in the state’s) control.”

Idaho’s Medicaid’s budget narrowly cleared the Legislature last year, passing the Senate by one vote. 

Senate Bill 1456 now heads to the Idaho House for consideration.

The bill includes about $66 million in provider rate increases; $58 million in non-discretionary adjustments and nearly $362,000 for regular employee pay raises called Change in Employee Compensation. 

The nearly $278 million Idaho Medicaid reversion would return around $93 million in state funds and $185 million in federal funds that Medicaid was allotted this fiscal year, but didn’t spend.   After that reversion, Idaho’s Medicaid spending for fiscal year 2024 is expected to be $4.4 billion.

The bill would only fund 24.5 of 28 new Medicaid staffers that Idaho Gov. Brad Little had recommended.  The Idaho Department of Health and Welfare, which administers Medicaid, originally requested 60 new Medicaid staffers, saying it struggled with day-to-day oaperations. The agency cited an audit that identified Idaho Medicaid had fewer staff despite serving more people, since Idaho voters expanded Medicaid to include a broader range of low income people. 

As part of a new budgeting process rolled out this year by JFAC co-chairs, the budget writing committee had previously set Idaho Medicaid’s barebones budget earlier this year, and was considering new spending requests
separately.

A legislative committee last year that studied how to save money in Medicaid didn’t conclude if Medicaid should be restructured, but it called for increased oversight of
Medicaid contracts. 

Forty states tap private companies to manage Medicaid benefits through a model called managed care. Idaho’s Medicaid benefits are managed by the state health department, managed care organizations, and health providers through a model called value-
based care.