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House Bill 277 — Medicaid expansion sideboards

House Bill 277 — Medicaid expansion sideboards

Phil Haunschild
March 20, 2019

Bill description: House Bill 277 would establish cost-control measures around the Medicaid program to help keep the program from ballooning out of control.

Rating: +4

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?

Currently, individuals who apply for Medicaid can receive benefits retroactively, which would cover expenses from the previous 90 days. HB 277 would direct the Idaho Department of Health and Welfare to seek permission from the federal government to reduce that 90-day period to 30 days. The fiscal note estimates that this could save Idaho taxpayers at least $100,000 annually, by reducing the retroactive transfer payments to enrollees.


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

HB 277 would have the Department of Health and Welfare submit a waiver to the federal government so that Idaho could establish work requirements for Medicaid enrollees. The requirements would be similar to those used for SNAP (food stamps) and TANF (Temporary Assistance for Needy Families), with the notable exceptions that parents with children up to 18 would be exempt and individuals would only have to work or volunteer for up to 20 hours per week. For SNAP, only parents with children under the age of 6 would be exempt from the work requirements and they must work at least 30 hours per week. The legislation would also exempt the following groups of individuals from work requirements:

  • Under 19 years of age.
  • Over 59 years of age.
  • Mentally or physically unfit for employment.
  • Pregnant.
  • A caretaker of an individual with a disability.
  • Participating in other state or federal work requirement, drug or alcohol rehabilitation, or disability programs.
  • Eligible to receive medical care as a Native American or Alaska Native (categories not granted an exemption by SNAP).

The fiscal note for the bill estimates that if these work requirements were approved, it would cost the state nearly $1.77 million every year; however, this is almost certainly overestimated. These numbers come from a Department of Health and Welfare analysis which makes several faulty assumptions.

First, it assumes that all eligible enrollees will take advantage of the education and training programs that they could use to meet the new requirements. No state which has enacted work requirements for any program has ever seen a 100 percent participation rate. Instead, many choose to go back to work, to volunteer or drop off the program.

Second, Idaho currently has great resources available for education and training and a framework for implementing work requirements. Idaho’s community colleges, adult education programs and career services programs offered by the Department of Labor would mitigate the need for any new programs. Similarly, as the work requirements for Medicaid would be building on the programs used for SNAP and Temporary Assistance for Needy Families, the Department of Health and Welfare would not need to create an entirely new layer of bureaucracy for implementing these requirements.

The state has many existing resources which can be repurposed or extended to administer the work requirements. Many employees who administer the work requirements for SNAP could move to administer these work requirements. Idaho has seen SNAP enrollees drop, yet H&W staff has gone up, indicating that there are many extra employees in this department. In both Maine and Arkansas, there were no estimated costs for implementing work requirements, as the states were able to repurpose existing employees and programs.

The work requirements implemented through HB 277 should save Idaho taxpayers substantially, as has been the case with similar requirements for SNAP benefits. SNAP enrollment has decreased from over 200,000 persons in FY14 to around 150,000 in FY18. If able-bodied adults choose to leave the Medicaid program by not participating in a job training program, working, or caring for family members, then there will be reduced costs to the taxpayers. We should not assume that everyone who leaves Medicaid will go into a “secondary gap,” where they are not eligible to obtain care under any program. These individuals may actually find a job and earn enough money to not need Medicaid.


HB 277 would have the Department of Health and Welfare seek a waiver from the federal government to require individuals who are eligible to enroll in the Medicaid program and who are above the Federal Poverty Line to receive Advanced Premium Tax Credits (APTC) instead of participating in the Medicaid program.

These credits, made available under federal law, give people subsidies for purchasing health insurance. But they are not available to someone enrolled in Medicaid, and the person who receives the credit and then becomes eligible for Medicaid becomes ineligible for the credit.

The waiver, if approved, would allow individuals to purchase health insurance, subsidized by these tax credits, on the market. Even though the subsidy is borne by federal taxpayers, it could save Idaho taxpayers money. This would be accomplished as private individuals would continue paying at least a small portion for their health coverage on the private market if they use the tax credits, rather than contributing nothing if they were on the Medicaid program. As the federal government provides 90 percent of the funding for Medicaid expansion enrollees and the state provides 10 percent, Idaho taxpayers do pick up a portion of the tab for Medicaid enrollees. This change could shift the financial cost of insurance for these individuals so that the majority of the cost would come from the federal government and the remainder would come from the insured person. Idahoans would then not be bearing this cost through their state taxes.

HB 277 would specify that if the federal government does not approve this waiver by January 1, 2020, those who are above the poverty level and would otherwise be eligible will receive Medicaid benefits.


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?

HB 277 would require the Legislature to declare that Idaho’s Medicaid expansion is void if a court rules that the increased Federal Medical Assistance Percentage (FMAP) rate—the portion of the cost for Medicaid enrollees born by the federal government—for Medicaid enrollees who are eligible under expansion is unconstitutional. Additionally, the bill would specify that Medicaid expansion would automatically sunset if the federal government were to change its funding level below the 90 percent at which is currently set.

This would ensure that Idaho maintains some sovereignty over the programs offered by the state. If the federal government were to make such a substantive change to the Medicaid program, HB 277 would ensure that Idaho has the opportunity to affirmatively approve these changes.


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