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House Bill 777 - Health & Welfare, Division of Medicaid, FY23 appropriation and FY22 Supplemental

House Bill 777 - Health & Welfare, Division of Medicaid, FY23 appropriation and FY22 Supplemental

Fred Birnbaum
March 15, 2022

The Idaho Spending Index examines appropriation bills on several fronts to add important context to lawmakers’ discussions as they are considered on the floor of the House and Senate. Among the issues we look at in drawing a conclusion about a budget:

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? Does the budget examine existing spending 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 the addition of 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 sincerely objectionable or sincerely supportable.

Bill description: House Bill 777 appropriates $4,044,709,00 and 213 full-time positions to the Department of Health and Welfare, Division of Medicaid for the 2023 fiscal year, and includes a FY22 supplemental. 

Rating: -1

This bill is a monumental testament to the out of control costs of the Medicaid program. In 8 years Medicaid has grown from a $2 billion program to a $4 billion one. With $2.8 billion of the total funding coming from the federal government, Idaho is now in the position of running its biggest single program with funds that are increasingly borrowed by the federal government. 

Medicaid now covers about 1 in 5 Idahoans, yet the program is not sustainable without the federal government picking up about 70% of the total cost. It gets worse. Idaho’s largest hospitals now receive more than half of their revenues from Medicaid and Medicare. Without these two programs, they would close according to the Idaho Hospital Association. 

There is no cost containment in this budget, as it contains over $200 million in provider rate increases, now disproportionately funded with federal money. The financial reckoning is coming for the Medicaid  program and Idaho is ill prepared. 

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