Medicaid reform bill sent to House floor

BOISE — A bill to make big changes to the way Idaho administers Medicaid advanced to the Idaho House floor Tuesday morning.

After around two hours of mostly negative testimony, the House Health and Welfare Committee voted on party lines to send House Bill 345 to the floor. The bill requires the Department of Health and Welfare to seek waivers from the federal government, which is required to make many changes to the Medicaid program.

One of those changes would change administration of Idaho’s entire Medicaid program over to a private third-party managed care organization, known as an MCO. The bill, sponsored by Rep. Jordan Redman, R-Coeur d’Alene, would also look to add work requirements to Medicaid expansion participants, requiring increased cost-sharing with patients, and give the Department of Health and Welfare director broad authority to make cost cuts if the federal government reduces its 90% spending match while the Legislature is out of session.

The bill is meant to contain costs of the program.

"This bill actually provides for immediate savings to the state and provides for long-term sustainability and accountability in the entire Medicaid program," Redman told the House Health and Welfare Committee Tuesday.

HB 345 was introduced after a previous bill that Redman sponsored, HB 138, which would trigger a full repeal of Medicaid expansion if 11 waivers were not obtained by a 2026 deadline, had advanced out the Idaho House, Many opponents expressed concern the bill would guarantee a repeal, and leave the more than 83,000 Idahoans enrolled in it without insurance suddenly.

Redman said HB 345 removed provisions in previous legislation that drew concerns, such as enrollment caps, lifetime eligibility limits, and ending most presumptive eligibility.

There were 13 people who testified against the bill and four spoke in favor; of the total who signed up online, 167 signed up in opposition and 15 supported the bill.

Opponents said that provisions like work requirements and increasing frequency of eligibility determinations would increase administrative costs and increase barriers for participants. Supporters have said that the bill will help constrain the program’s significant costs while keeping Medicaid in place.

“HB 345 will prevent many needy, deserving Idahoans from getting essential care by snaring them in a web of complicated, unnecessary red tape and barriers to insurance,” Valerie Steffen told committee members.

Some testifiers and committee members both questioned if adding work requirements would add more administrative costs than the potential savings would be worth.

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.

Hillarie Hagen, health policy associate at Idaho Voices for Children, noted that in Arkansas — which was the first state to implement a Medicaid work requirement in 2018 before a federal judge halted it the following year — that thousands of recipients lost coverage, despite most of them being eligible.

More than 18,000 Arkansans lost health coverage during the period Arkansas implemented its work requirements, but more than 97% were compliant or had exemptions, the Arkansas Advocate reported. Implementing that work requirement cost the state and federal governments more than $26 million, according to the federal watchdog agency the Government Accountability Office. 

“Further studies showed that 56% delayed necessary medical procedures, 64% missed taking prescriptions as prescribed, and half accumulated significant medical debt,” Hagen said. “Many also reported missing work because of untreated medical conditions, and there wasn’t any evidence of increased hours worked or new employment.”

One testifier, Elinor Chehey from United Women in Faith, underscored that the bill’s fiscal note anticipated state general fund savings of $5.3 million in fiscal year 2026 and $9 million annual after fiscal year 2027, yet the Legislature this year approved a bill that would send $ 50 million annually to families for private and homeschool school education, among other educational expenses.

Kyle Rooks of the Community Health Center Network of Idaho spoke in favor of the bill, especially moving toward managed care. The change would shift Idaho’s current administration of the program, which is overseen by physician- and provider-led valued-based care organizations, or VCOs.

The VCO model launched in Idaho in 2022.

Rooks said that the current VCO model provides “disproportionate financial risk” to community health care centers, which are nonprofit health centers that focus on high-needs communities and treat patients regardless of their ability to pay.

Ken Hart, CEO of Valley Family Healthcare, which is a community health center serving people in eastern Oregon and western Idaho, also spoke in favor. He said that many of the center’s patients are covered by an organization similar to an MCO and that it runs well.

House Minority Leader Ilana Rubel, D-Boise, expressed skepticism of the effectiveness of managed care. Some other programs in Idaho are administered by MCOs, such as administration of the Idaho Behavioral Health Plan through a $1.2 billion contract with the MCO Magellan of Idaho.

“I’ve been to a lot of town halls and other gathers with a lot of angry mobs from previous MCO contracts that were very specially negotiated for Idaho’s unique needs, etcetera, etcetera, and we would hear endless horror stories from providers who had to spend all day, every day on a whole trying to get things approved, and it was a mess,” Rubel said.

Redman had told committee members that a new contract with an MCO would be better because it would be overseen by the legislative medicaid review panel formed last year.

Rep. David Leavitt, R-Twin Falls, made a motion to send the bill to the House floor.

Rubel then made a substitution to hold the bill in committee. Her motion was quickly followed by an amended substitution motion — which is the maximum number of motions that can be made — by Rep. Lucas Cayler, R-Caldwell, to hold the bill in committee until March 11.

Cayler said he wanted to see a hearing on HB 138, which includes a repeal trigger of Medicaid expansion, in the Senate. Cayler’s motion narrowly died in a 7-8 vote.

Rubel’s motion to hold the bill failed in a 3-12 vote. The motion to send the bill to the floor passed in with a 13-2 vote, with only the Democrats voting against it.