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House Bill 216 — Supplemental Appropriation for Medicaid

House Bill 216 — Supplemental Appropriation for Medicaid

Fred Birnbaum
February 23, 2021

The Idaho Spending Index examines appropriation bills on several fronts to add some important context to lawmakers’ discussions as the spending bills are considered on the House and Senate floors. As we look at the budget, we consider the following issues:

Does the agency requesting these funds serve a proper role of government? Has wasteful or duplicative spending been identified within the agency, and if so, has that spending been eliminated or corrected? Have budget-writers reviewed existing outlays to look for opportunities to contain spending, e.g., through a base reduction? If there is a maintenance budget, is that maintenance budget appropriate? Are the line items appropriate in type and size, and are they absolutely necessary for serving the public? Does the budget contemplate adding new employees or programs? Does the appropriation increase dependency on the federal government?

Our analysis is intended to provide lawmakers and their constituents with a frame of reference for conservative budgeting, by summarizing whether appropriation measures contain items that are truly  objectionable or legitimate and worthy of support.

Bill Description: FY21 supplemental for Medicaid for $369.8 million

Rating: -1

This is the largest supplemental request for an agency or program in Idaho’s history, and this one supplemental bill exceeds the sum of all supplemental requests for all agencies in many years in the past 20. 

It also reflects one of the largest, if not the largest programmatic budget forecasting error in Idaho’s history — and nobody at any level has been held accountable for this mistake. The actuarial firm Milliman made estimates, in 2018, about the costs of expanding Idaho’s Medicaid program, and it revised those projections last fall. In writing about those exploding costs, the firm conceded, “The largest driver is the higher medical and pharmacy benefit cost.” Not Covid. Meaning that the use of medical services by the Medicaid expansion population exceeded official forecasts — as has been the case in so many other states.

Sadly, many members of Joint Finance-Appropriations Committee consider this supplemental to be a worthwhile measure because federal money is used to fill in the holes caused by the cost overruns in the state Medicaid program. On net, this bill reduces the General Fund appropriation by $35.8 million, when compared to the original FY21 appropriation. 

Two important points must be made, however. First, the person who believes that the federal deficit is a problem and then votes for a supplemental appropriation that pulls in $304.8 million more in federal money based on budgeting errors is guilty of hypocrisy. Second, Medicaid is considered a non-discretionary entitlement program, which means that it is appropriated by the federal government on a programmatic basis. If Idaho had chosen not to expand Medicaid, the money would NOT go to other states; instead, it would not have been appropriated. So in turning down the federal money for Medicaid, whether expansion or traditional Medicaid, the federal deficit is reduced. 

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