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DHW director uncertain of Medicaid savings

DHW director uncertain of Medicaid savings

Idaho Freedom Foundation staff
March 4, 2010
Idaho Freedom Foundation staff
Author Image
March 4, 2010

Richard Armstrong, the director of the Idaho Department of Health and Welfare (DHW), said he’s not certain that he can come up with the $42 million in savings to Medicaid that lawmakers are asking him to find.

“I am being pushed absolutely to the edge of a very, very serious cliff,” Armstrong said. Lawmakers on the Joint Finance-Appropriations Committee (JFAC) gave DHW and the governor the authority to find savings in Medicaid costs by reducing health care prices and benefits. “The notion that we can solve these problems, I think, is not real. There are so many barriers in front of us to be able to get this kind of a reduction that it is a daunting task.” Medicaid provides health care for low-income children and adults as well as people with disabilities and other special health needs. DHW estimates more than 150,000 Idahoans will be on Medicaid during the next fiscal year, which begins in July.

Armstrong said he will do his best to find savings, but his hands are somewhat tied. “We will pursue all of these issues, absolutely. However, what you have to understand (is that) we have to have permission on everything from the federal government.” The federal government pays 79 percent of Medicaid costs. That money for health services comes with regulations and oversight. Armstrong said the last time DHW asked for federal approval for state Medicaid reductions, it took nine months to get a response. “If we turned in the request today, the ability to see significant changes in 2011 is dim,” Armstrong said. The 79 percent federal reimbursement rate will go down. Currently, it’s set to expire at the end of December, but Congress could push that deadline back to June 2011. “The biggest problem that we as a society face in Idaho is the fact that the federal matching rate is to go back,” Armstrong said. “That would be $140 million in general funds that would be required to maintain the Medicaid program.”

Armstrong added that current federal rules prevent some service reductions, which could limit his search for savings. One issue proposed by lawmakers would be to institute waiting lists for non-essential health services. “We cannot put people into waitlists because that is in effect a de facto change in their eligibility,” Armstrong said. He also said it may not be doable to change Medicaid’s prescription drug program, which was suggested by Rep. Fred Wood, R-Burley. Armstrong said he received the list of recommended savings and reductions from lawmakers Thursday, and will need a few days for his staff to come up with a path forward. “I think there’s a host of issues that we need to spend some time on,” he said.

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