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House panel reauthorizes nearly $10 million for Transitional Medicaid payments

House panel reauthorizes nearly $10 million for Transitional Medicaid payments

Dustin Hurst
January 20, 2016

The Idaho House Health and Welfare Committee approved a plan Tuesday to give Medicaid coverage, for up to 12 months, to working adults who no longer qualify for the program.

The proposal, which still needs a Senate hearing and approval to take effect, will add more than $9.7 million to Medicaid’s ever-growing budget.

The arrangement is dubbed Transitional Medicaid and allows workers, who earn too much for Idaho’s Medicaid program, to continue receiving health services under the plan for up to a year.

To disqualify herself, a worker from a four-member home would have to earn more than $439 a month. Children in that situation would continue receiving coverage under the Children’s Health Insurance Program, or CHIP.

State lawmakers took up the issue because the federal government reauthorized transitional Medicaid payments late last year. Congress originally repealed the temporary coverage as part of Obamacare, which required states to expand Medicaid to the working poor, thus making the transitional payments unnecessary.

But, the U.S. Supreme Court struck down mandatory Medicaid expansion from Obamacare in a June 2012 ruling. Since then, however, states had — and continue to have — the option to accept program expansion. Idaho and several other states have hesitated, as they see flaws if they sign on to an open-ended entitlement expansion.

The Idaho Department of Health and Welfare sees Transitional Medicaid as helpful to workers who might need a little help as their household budgets grow. Department staffer Julie Hammon told the committee the transition period will cushion workers.

“This program is designed to promote participants finding work without the fear of losing Medicaid coverage immediately after finding employment,” Hammon said.

She projected at least 2,700 Idahoans will receive transitional Medicaid payments each year. With the proposed expansion, the department expects the payments to cost $9.7 million annually. The state general fund will pay $2.83 million of that tab, and the federal government will pay the rest.

After a worker disqualifies herself from Medicaid for earning too much, the department verifies income levels, but cannot end benefits for employees who earn higher incomes.

Hammon said, while workers’ earnings grow, they rarely increase to even median state income levels because Idahoans taking part in Medicaid generally have little work experience and few job skills.

The committee approved the regulation on a nearly unanimous tally. Only Rep. Brandon Hixon, R-Nampa, dissented. He told IdahoReporter.com after the meeting he didn’t agree with the program paying benefits to workers who earn high levels of income.

Committee Vice Chair Kelley Packer, R-McCammon, praised the plan as an exit from poverty.

“So, to have any way of being able to improve your circumstances without being penalized is a positive step forward,” Packer said.

The panel — and the state as a whole — might not have had much say in the decision to reauthorize the entitlement payments. The federal government requires states that haven’t expanded Medicaid to offer the coverage. A DHW spokesman couldn’t tell IdahoReporter.com what possible penalties the federal government might impose if the state didn’t approve the plan.

The state’s portion of the Medicaid budget could grow by more than $12 million in 2017, a 2.4 percent increase above this year. If lawmakers approve Gov. Butch Otter’s budget, Idaho would pay more than $514 million out of the general fund for Medicaid.


The program’s total Idaho cost, including state, dedicated and federal funds, would hit more than $2.21 billion in 2017 if legislators accept the Otter budget. That would represent a 5.3 percent spending hike for the program above the 2016 appropriation.

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