Bill Description: House Bill 138 would require the effective repeal of Medicaid expansion in Idaho unless certain cost-saving measures are implemented and reform benchmarks are met. 

Rating: +5

NOTE: House Bill 138 is similar to House Bill 419, introduced during the 2024 legislative session.

Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?

Medicaid is one of the largest and most expensive government programs, always growing in size, scope, and spending, while increasing the people’s dependence on government and forcing private providers out of the market. Medicaid expansion has been particularly harmful because it expanded this program of dependency to able-bodied adults.

House Bill 138 would amend Section 56-267, Idaho Code, to condition the continuation of Medicaid expansion on a number of cost-saving measures and reform benchmarks. 

Among these are requiring the federal match rate to remain at 90%; putting an enrollment cap on able-bodied adults enrolled in Medicaid expansion; and suspending the practice of automatically renewing the eligibility of participants. 

The bill would require the health and welfare department to implement work requirements for some able-bodied adults. Numerous exceptions would still exist, unfortunately, for a host of reasons. These including age (younger than 19 or older than 64), physical or mental disability, pregnancy, parenting a young or disabled child, receiving unemployment compensation, or participating in a drug addiction or alcohol treatment and rehabilitation program.

The department would also be required to maintain a Medicaid improper payment rate of 5% or less. This requirement alone would save Idaho taxpayers $136 million if successfully achieved. 

The bill would also require that no Medicaid expansion funds "be used to fulfill any gender reassignment procedures, including treatment and surgery" for Idahoans. 

If these and other requirements created by House Bill 138 were not met by July 1, 2026, the department would be required to suspend Medicaid expansion no later than Oct. 1, 2026. If the department temporarily mets these requirements but later ceased to meet them, the department would be required to suspend Medicaid expansion within 90 days.

While implementing cost-saving measures and hitting these benchmarks would be beneficial and save taxpayers an estimated $163 million, the benefits of Medicaid expansion repeal would likely be even greater over time, both financially and to society as a whole. 

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Does it transfer a function of the private sector to the government? Examples include government ownership or control of any providers of goods or services such as the Land Board’s purchase of a self-storage facility, mandatory emissions testing, or pre-kindergarten. Conversely, does it eliminate a function of government or return a function of government to the private sector?

Health care should be provided and obtained in the private sector. Any time individuals are enabled or encouraged to seek health care or health care subsidies through government, the private market for health care is weakened and the people’s dependence on government is increased. 

By reducing the number of individuals who depend on a government program, House Bill 138 would decrease public sector competition with the private sector. 

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Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?

Medicaid is funded through a combination of tax dollars and government debt. Any time individuals are enabled or encouraged to seek health care or health care subsidies through government, they are receiving services funded through redistribution.

By reducing the number of individuals who depend on a government program, House Bill 138 would decrease government redistribution of wealth.

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Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?

The Fiscal Note for House Bill 138 suggests that the cost-saving measures and reform benchmarks contained in the bill would save taxpayers an estimated $163 million annually in state spending. 

Alternatively, the effective repeal of Medicaid expansion would save taxpayers an estimated $109 million in state spending and more than $1 billion in federal spending each year. The savings would increase exponentially with each year the repeal remained in place. 

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Does it violate the principles of federalism by increasing federal authority, yielding to federal blandishments, or incorporating changeable federal laws into Idaho statutes or rules? Examples include citing federal code without noting as it is written on a certain date, using state resources to enforce federal law, and refusing to support and uphold the Tenth Amendment. Conversely, does it restore or uphold the principles of federalism?

Ninety percent of the funding for Medicaid expansion comes from the federal government, which means that as the program grows, the state becomes increasingly dependent on federal dollars, and those federal dollars become an ever-larger share of the state budget. As has been seen with Medicaid and other federal programs, federal dollars come with strings that obligate the state to comply with policies and priorities that go against its best interests.

The effective repeal of Medicaid expansion would reduce Idaho's reliance on federal dollars and be a meaningful step toward regaining the independence this reliance has cost the state.

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