Idaho lawmakers turned their sights Thursday to the second-largest spending item in the state budget, health and human services. That includes Medicaid, which the state spends close to $300 million on. Medicaid provides health care for low-income children and adults as well as people with disabilities and other special health needs. The federal government currently covers 79 percent of Medicaid spending. The Joint Finance-Appropriations Committee (JFAC) is asking Gov. Butch Otter and the Department of Health and Welfare (DHW) to find $42.3 million in savings in Medicaid, due to rising costs and dwindling state revenues.
“We are trying our best to make sure the people who need these services are getting these services,” said Sen. Joyce Broadsword, R-Sagle, who helped put together the Medicaid budget. Overall state spending for Medicaid would see a $10 million, 3.5 percent reduction in the next budget approved by JFAC Thursday.
The $42.3 million in savings would be split between one-time savings needed due to the larger 7.5 percent cut in Medicaid spending in the current budget and permanent reductions. Lawmakers would give the governor and DHW the authority to find those savings, with a some restrictions and suggestions. They would need to start looking for savings by reducing prices for medical services. That would include negotiating lower payments to doctors and health care providers for some services. After that, benefits for Medicaid members could be trimmed. Eliminating entire services, including developmental disabilities, mental health, or physical therapy, would be a last resort. Eligibility requirements for Medicaid can’t be changed due to federal rules. State lawmakers would review all the adjustments made by the governor and DHW next year.
Rep. Fred Wood, R-Burley, said one of the largest savings would be in switching to a more limited prescription drug plan. He said the state currently has few limits on medications for Medicaid and that the state could behave like some private providers and put in limits and bargain with pharmaceutical companies for lower prices. He said he has faith that DHW director Richard Armstrong can find those savings, and is willing to give him and the governor flexibility to find savings. “We have to look at the stark economic reality that the state finds itself in,” he said. “As much as we don’t like it … we have to be creative in trying to figure out how we can maintain as many services as we can.”
Sen. Nicole LeFavour, D-Boise, voted against the Medicaid budget and said she’s not sure where the governor and DHW will make reductions. “We’re reducing the budget beyond where we know how to make it work,” she said. “We’re just going to put it out there and hope the governor and the Department (of Health and Welfare) can figure it out.” She said reductions to Medicaid would could harm the most vulnerable people in Idaho. "We're talking about people's lives and their health."
Broadsword responded that lawmakers should give DHW more authority. “We can’t micromanage the department and tell them each and every thing they should and shouldn’t do,” she said, adding that the budget approved by JFAC gives them some guidance. “We’re saying, don’t rush out there and eliminate programs. Do a thoughtful approach.”
Wood said he and other lawmakers don’t enjoy making budget cuts, but they are necessary this year. “This is very difficult on all of parts to do this, but the fact of the matter is that we have to do it,” he said.