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With Medicaid expansion, Idaho offloads cost for poor to debt-saddled federal government

With Medicaid expansion, Idaho offloads cost for poor to debt-saddled federal government

Dustin Hurst
February 5, 2015
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February 5, 2015

Idaho’s plan to expand Medicaid is an effort to offload costs for the sick and poor to the federal government, Department of Health and Welfare leader Dick Armstrong said Thursday.

Armstrong, presenting to the House Health and Welfare Committee, told legislators the plan reduces costs for taxpaying Idahoans, too.

“We transfer the responsibility for low-income to the federal government,” Armstrong said. “This one seems to be the best path forward at this moment. Everything else would require so much state money, that, quite frankly, we don’t have, for this project.”

If lawmakers adopt Medicaid expansion, an option under Obamacare, the shift would be significant. The agency projects $7.2 billion in spending for new enrollees through the next decade and Idaho would likely only cover $194 million of that.

The transfer would ease costs for counties and the state, who regularly spending many millions on indigent care through the catastrophic health care fund.

Armstrong’s plan isn’t traditional Medicaid expansion, but a modified outline that would place some new enrollees in managed care to cut costs and encourage providers to focus on outcomes, rather than simply getting paid.

The proposal would also subsidize private insurance plan purchases through the Obamamcare exchange for other new enrollees.

Should Idaho lawmakers choose not to expand, county and state taxpayers will cover the spending anyway, Armstrong said.

The plan would increase Idaho’s dependence on federal dollars for survival. The Gem State is already on the upward path of federal reliance, with lawmakers using $2.35 billion in federal dollars in 2014 spending plans. That’s up from 2003’s $1.35 billion.

The proposal, approved by Gov. Butch Otter’s hand-picked Medicaid work group last year, would add 103,000 enrollees to government health care at a time when more Idahoans use welfare programs than ever.

DHW reported weeks ago that more than 332,338 residents relied on the state and federal government for help with food, child care and Medicaid coverage in fiscal year 2014, a 69 percent increase from fiscal year 2006.

In 2006, only 13.8 percent of the state’s 1.46 million residents relied on welfare programs. In 2014? It was 20.2 percent of Idaho’s 1.61 million residents.

Yet, officials remain confident they can expand this program and find ways to encourage Idahoans to take control of their own care.

Armstrong’s Medicaid package includes very modest co-payments, which enrollees can work off by forming healthy habits. Though the co-payments are low, as little as $1, Armstrong said they still carry heft.

“To them, they’re meaningful,” Armstrong.  “We would enforce them. We want to make sure they use their health accounts to cover it.”

Importantly, Armstrong said through expansion, the state could recapture taxes Idahoans pay under Obamacare.  The director said one consultant suggested Idahoans pay between $20 million and $50 million in Obamacare taxes annually.

Using the upper estimate, then, projects Idahoans will pay $500 million for Obamacare through the decade, while receiving $7.2 billion in federal spending in the same time frame.

That inequity would add to Idaho’s welfare state status. A recent report revealed for every dollar Idaho taxpayers put into the federal pot, they get $1.40 back.

Armstrong’s plan also contains an opt-out clause, a provision to allow Idaho to leave expansion if conditions change after three years. That, Armstrong explained, was a direct request from Otter.

“Yes, we have the opt out,” he said. “It would be bloody awful.”

Critics disagree if the state could rip cheap or free medical coverage from 100,000 Idahoans.

“Some legal experts say that Medicaid expansion is like the Hotel California --- you can check in, but you can never check out,” warned Foundation for Government Accountability Senior Fellow Christie Herrera.

She added that the federal government holds the power to revoke all Medicaid dollars if the state drops new Medicaid participants. Herrera also suggested Idaho lawmakers view federal promises with great skepticism.

“Expansion supporters will point to letters written by the federal government, promising that will not be the case,” she said. “But letters do not supercede what’s in federal statute --- so there could be big lawsuits ahead for states who expand Medicaid and attempt to roll it back a few years later.”

Wayne Hoffman, president of the Idaho Freedom Foundation, knocked the state agency for not being completely forthright about expansion’s potential impacts on Idaho taxpayers.

“I'm flabbergasted by the level of distortion and misdirection being employed by the Department of Health and Welfare to secure expansion Obamacare,” Hoffman said.

“I'm not surprised by the sales pitch. I am surprised and offended the agency isn't honest about the impacts, costs and downsides associated with this plan.”

Hoffman noted the agency’s first Powerpoint slide billed Armstrong’s plan as “An alternative to Medicaid expansion.”

There’s no word if legislators will adopt expansion this year. In his State of the State address delivered just weeks ago, Otter only asked lawmakers to explore the plan.

Otter hasn’t fully endorsed his work group’s proposal, but said he liked pieces that encourage personal responsibility and accountability.

Note: The Idaho Freedom Foundation publishes IdahoReporter.com. The Idaho Freedom Foundation paired will FGA to poll Idahoans on Medicaid expansion. That poll revealed a majority of Idahoans don’t want to expand government health care in the state. See that poll here.


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