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Medicaid in Idaho: To expand or not to expand … that is the question

Medicaid in Idaho: To expand or not to expand … that is the question

Idaho Freedom Foundation staff
October 9, 2013
[post_thumbnail]House Minority Leader John Rusche, D-Lewiston, is a member of the Legislature's Health Care Task Force. One of the issues facing the task force is expansion of the Medicaid program.

According to leaders at the Idaho Department of Health and Welfare (IDHW), the growth in the level of Medicaid benefits consumption within the state has slowed the past couple of years.

“The increase in the number of those eligible for services has begun to slow,” said Paul Leary, an administrator with IDHW, in addressing the Idaho Legislature’s Health Care Task Force, a committee comprised of members of both the Senate and the House of Representatives.

According to Leary:

- The number of Idahoans eligible for Medicaid services during fiscal year 2012 was 236,111, an increase of 3.9 percent from the previous fiscal year.

- During FY13, the number of those eligible for Medicaid rose to 241,496, an increase of 2 percent from the previous fiscal year.

- And during FY14 (the 2014 state fiscal year began on July 1 of this year), it is estimated that the number of Idahoans eligible for Medicaid will rise by only 1.5 percent.

Begun in 1965, the Medicaid program provides certain health care services to individuals and families with low incomes and limited resources. Financed with a combination of federal and state tax revenues, the expanding costs of Medicaid have in recent years become a topic of growing concern among the individual states, despite the eligibility of the program being based on a variety of means testing processes.

Several members of the task force took note of the trend, both the growth in Medicaid consumption among Idahoans and the decline in the growth trend. “How does this growth correspond with the population?” asked Sen. Marv Hagedorn, R-Meridian. Leary indicated that he didn’t know.

Sen. Dean Cameron, R-Rupert, co-chair of the task force, asked Leary “to what do you attribute the decline in the growth rate?”

“The economy is improving,” Leary replied. “People are eating healthier again, they’re getting back on their feet and doing better.”

The data on Medicaid consumption among Idahoans comes at a strategic time for the state. A key element of President Barack Obama’s Affordable Care Act law (Obamacare) was to have mandated that the individual states reduce eligibility requirements for Medicaid, and expand the number of participants in their respective programs. However, the United States Supreme Court overturned that component of the Obamacare law, so expansion of Medicaid is now left as an elective choice for each of the states.

In response to the Supreme Court decision, the Obama administration made an offer to state governments to entice them to electively expand Medicaid eligibility: If a state chooses to expand eligibility within the calendar year 2013, the federal government would pay for the additional costs incurred because of the expansion for the first three years.

In March of this year, a task force that was appointed by Gov. Butch Otter to study Medicaid and suggest ways to improve the program unanimously recommended that Idaho take advantage of the Obama administration’s offer and expand Medicaid immediately.

This year’s legislative session nonetheless concluded without the passage of legislation to enable Medicaid expansion.

Given the statistics that Leary revealed, and the fact that there has been no official decision to expand Medicaid eligibility in Idaho, the task force focused on two potential dilemmas that the state now faces.

(1) Some legislators worry that without expanding Medicaid eligibility in Idaho, there will be a segment of the population that is arguably poor from a financial standpoint, but nonetheless do not qualify for either Medicaid services or government subsidies with which to purchase insurance from the insurance exchange. The original intent of the Obamacare law was to alleviate this “gap group” by providing insurance subsidies for some poor persons and covering others under an expanded Medicaid program.

On this point, House Minority Leader John Rusche, D-Lewiston, a member of the task force, asked Leary if the governor’s staff had proposed any new ideas of how to provide help to this segment of the population if indeed the Legislature never elects to expand Medicaid.

Leary responded “no they have not,” while Cameron noted that “it is up to us” (members of the Legislature) to craft such solutions.

(2) The other possible dilemma that task force members addressed is a phenomenon often described as the “woodwork effect.” According to this notion, there exists a segment of the population that is qualified for certain kinds of government welfare services, yet doesn’t even know the services are available. Once people in this category learn of the availability of the welfare services, so the theory goes, they “come out of the woodwork” to apply for the services.

On this point, Rusche noted that as the presence in Idaho of the Obamacare insurance exchange becomes more familiar, there will likely be an uptick in the number of Idahoans inquiring about government-funded health care services. “How are you equipped to handle the expanded demand?” Rusche asked Leary.

“I think we can handle that,” Leary replied.

Russ Barron, an administrative associate of Leary’s at IDHW, also responded to Rusche’s concerns. “I think we’ll be OK,” he noted. “The woodwork effect will definitely be there, but I think we’re staffed up and ready for it.”

The Legislature’s Health Care Task Force plans to meet again in November. Expanding Medicaid in Idaho is anticipated to be a major legislative issue during the 2014 legislative session.

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