Little signs Medicaid reform bill, shifting program to managed care and creating work requirements

BOISE — Idaho Gov. Brad Little on Wednesday signed a bill that may bring significant changes to Idaho’s Medicaid program.

House Bill 345 directs the Idaho Department of Health and Welfare to pursue a number of changes to Medicaid through requests to the federal government, which include shifting its administration to a private, third-party managed care organization, or MCO.

The bill would also require the state health department to pursue a waiver, which is a way to change how the state administers the federal program, that would create work requirements for the Medicaid expansion population.

Medicaid expansion was approved in 2018 to broaden coverage to those who fell in the gap between earning too much to qualify for traditional Medicaid and not earning enough to qualify for credits to purchase private insurance through the state health care exchange.

“We want Idahoans to become as self-sufficient as possible,” Little said Wednesday in an emailed statement. “House Bill 345 reinforces that goal while reasonably reeling in Medicaid spending so taxpayers are not overly burdened by this program in the outyears. House Bill 345 is a huge improvement over a previous version that would have reversed voter-approved Medicaid Expansion in 2018. The voters spoke loudly in 2018 with their votes, and as elected leaders we must continue to respect that. I am pleased House Bill 345 improves the Medicaid program without rejecting the will of the voters on Medicaid Expansion.”

There were two other bills proposed this year that would have fully repealed Medicaid expansion in an effort to contain costs.

Rep. Jordan Redman, R-Coeur d’Alene, sponsored HB 345 as well as the earlier bill, HB 138 — which would have created so many strict conditions that it would have guaranteed a repeal of expansion.

Redman worked with Senate Health and Welfare Committee Chair Julie VanOrden, R-Pingree, on HB 345 to address some of the concerns on the previous legislation.

HB 345 includes changes such as requiring participants to pay premiums and co-pays, ending the practice of automatically renewing eligibility based on information the health department has from other programs, and giving the health department director broad authority to start cutting costs in the event the federal government reduces its payment match on expansion while the Legislature is out of session.

The total Medicaid budget, including federal funds, sits at nearly $5.3 billion — the state’s general fund share would be around $996 million in total for the upcoming fiscal year, based on the governor’s recommended budget.

The Medicaid expansion portion of the budget is about $1.4 billion in both state and federal funds, with the federal government covering 90% of the costs and the state covering the remaining 10%.

As of October, there were 294,664 Idahoans enrolled in all of Medicaid, and as of February there are more than 83,000 people enrolled through expansion.

HB 345 moved expeditiously through the Legislature; lawmakers introduced the first version of the bill on Feb. 25, and it passed out of the House committee the next week on March 4 and off the full House floor March 6.

Senate Health and Welfare sent the bill to the floor on March 10, and the full Senate passed the bill the next day, on March 11.

The speed at which the complicated legislation moved worried some health care advocates, especially several who advocate for those with disabilities because the bill repeals all the existing administrative rules around several programs vital to that population, the Idaho Press reported previously.

Public testimony in both House and Senate committee hearings was overwhelmingly in opposition, largely over concerns that work requirements would be overly burdensome for both participants and staff at the health department.

The Idaho Democratic Party on Wednesday released a statement condemning the bill, citing many of the same concerns about work requirements and managed care.

“These so-called ‘work requirements’ do nothing to help find jobs, but they will take away insulin, cancer treatment, and mental health services,” IDP Chair Lauren Necochea said in the emailed statement. “Republicans are also inserting a profit-driven middleman into Medicaid through managed care, a reckless scheme that threatens to gut already overstretched disability support services.”

The bill cleared both chambers in party-line votes, 61-9 in the House and 29-6 in the Senate. It went into effect immediately upon Little’s signature.