Medicaid reform bill heads to Senate

BOISE — A sweeping Medicaid reform bill — introduced just over a week ago on Feb. 28 — advanced to the Senate floor Monday, amid an hour and a half of mostly negative testimony.

If House Bill 345 passes the Senate, it will head to the governor's desk.

The bill would make significant changes to the way Idaho administers its Medicaid program, including contracting with a third-party managed care organization to oversee the entire program, repealing all of the administrative rules over how Medicaid is currently overseen, and implementing work requirements for the Medicaid expansion population.

Bill sponsor Rep. Jordan Redman, R-Coeur d'Alene, told the Senate Health and Welfare Committee on Monday that he worked with senators on HB 345 after a previous bill of his, HB 138, passed out of the House.

HB 138 would have repealed Medicaid expansion. The idea behind both bills, Redman said, is to control costs of the program.

"I believe this took the input from what we saw at House Bill 138 and I believe this is a very good bill," Redman said.

If HB 345 were to pass, Idaho's entire Medicaid program would be administered by a managed care organization, known as an MCO, or multiple MCOs. The process of creating a new contract for this would be overseen by a legislative Medicaid oversight panel, Redman said.

Several testifiers on Monday expressed concern about this significant shift as well as the sudden repeal of hundreds of pages of Idaho Department of Health and Welfare administrative rules regarding Medicaid programs. A number of advocates for people with disabilities argued that they were not included in discussions and urged lawmakers to make sure they had a seat at the table, as many people with significant disabilities rely on Medicaid for services, as the Idaho Press previously reported.

Hannah Liedkie, president/CEO of Opportunities Unlimited, a Lewiston-based nonprofit that serves people with disabilities, said giving the Idaho Department of Health and Welfare the power to rewrite rules that took decades to craft gave "undue power to bureaucrats."

She referenced an earlier comment by Redman, who had said he thought the health department would act "swiftly" to replace the rules being repealed.

"I've been working with this department for 20-plus years, I rarely see anything done swiftly, and I do anticipate many changes if we are not at the table," Liedkie said.

The rules that are being repealed include provisions regarding recipients with disabilities getting home- and community-based services covered, coverage for early screening diagnostics, and others.

Deputy Director of Medicaid Juliet Charron said that, should the bill pass, the agency would be prepared to replace the rules with "minimal changes" to reflect the changes in the bill.

A number of opponents argued that the work requirements for Medicaid expansion participants in the bill would place an undue administrative burden on the health department and on participants who would be tasked with doing the paperwork to prove they met eligibility.

The bill would require that able-bodied adults must work at least 20 hours a week to continue to be eligible for coverage. To meet the requirements they could also volunteer for 20 hours a week or work and volunteer for a combined 20 hours or more.

There would be exemptions for those younger than 19, older than 64, parents or caretakers responsible for children younger than 6, parents or caretakers caring for a dependent with a serious medical condition or disability, those receiving unemployment compensation, participating in a drug or alcohol treatment program, or attending college, university or vocational school at least part time.

"This bill suggests that the working poor are lazy and need a government overseer to get them off the couch," said Jean Henscheid, co-president of the League of Women Voters of Idaho. "This is not true. You are tackling the cost issue not with a sword, but with a banana, a rotten one at that."

Henscheid noted that Medicaid expansion eligibility required some level of income. Medicaid expansion was approved in 2018 by Idaho voters to provide health care coverage to those who fell in the gap between traditional Medicaid coverage and qualifying for private insurance through the state health care exchange.

Lorraine Draper told committee members that she was sure she would not have received the coverage she needed after a severe accident had the work requirements in the bill been in place at the time.

In 2020, she was hospitalized with severe brain injuries, heart complications, nutrient deficiencies, and "medical bills that could have buried me." Through Medicaid coverage, she was able to access services to recover as well as remain sober, Draper said.

"I'm a proud student, fiancée and an active member of my community, not because I never needed help, but because I had it when I most needed it," Draper said. "... If House Bill 345 had been in place at the time, I wouldn't be standing here today. Instead, I might be telling you a different story, one of a homeless, crushing debts, and continued struggling addict, with no education and no hope for the future."

Draper told the Idaho Press later that it would have taken months or maybe up to a year to be determined "disabled" by the health department in order to meet HB 365's exemption, and by then she would have already been crippled with debt.

Some who spoke in favor said they would have rather the bill went even farther.

"I think this is a small step, but perhaps too small a step," Fred Birnbaum, of the Idaho Freedom Foundation, said. "I'd like to actually see a bigger step, but it is still a step in the direction of reform."

He highlighted the high costs of Medicaid and the federal debt. Currently, the federal government pays for 90% of the Medicaid expansion benefits, while the state covers the remaining 10%.

Chris Cargill, president/CEO of the Mountain States Policy Center, said that Medicaid "gives many citizens, we believe, a false sense of security."

He argued that the current presidential administration is likely looking to make major budget cuts that may involve Medicaid and reducing the federal match.

Some committee members also spoke to wishing the bill went farther with its cuts, but supported making some change.

Sen. Glenneda Zuiderveld, R-Twin Falls, said she would have rather seen HB 138, "but this is what's before us."

Sen. Brandon Shippy, R-New Plymouth, said he was "reluctantly" supporting the bill, but still had reservations about moving to an MCO.

"There may be some things, that we're maybe creating a monster that will live on perpetually here and we might regret that," Shippy said.

Senate Minority Leader Melissa Wintrow, D-Boise, was the lone "no" vote on the committee. She had numerous concerns about the cost of administering work requirements and unintentionally dropping eligible patients, as well as about a provision to give the IDHW director broad authority to make cuts should the federal government reduce its match.

Wintrow also sits on the budget-writing committee, and noted that the state appropriation for Medicaid expansion is around $100 million, and around $10 million of that is paid for through hospital assessment.

"So the state share is only about $90 million, maybe I'm in the ballpark there, plus if we're actually proposing almost $400 million in income tax and other relief," Wintrow said, referencing a slate of tax cut bills moving through the Legislature, including the largest income tax cut in state history. "if we even took a little sliver of that, we could afford to do Medicaid expansion, and to me budgets (are) about values and priority. My values is there, not income tax rebates."

The bill passed and heads to the full Senate for consideration.