Note: This year IFF rated maintenance bills according to a more refined system. This is an enhancement bill, and will be rated as a standalone bill. IFF will only consider enhancement line items in these ratings. This means that FTP reductions passed in maintenance legislation will not be evaluated here, among other things.
Bill Description: Senate Bill 1433 is an enhancement of $493,354,800 and 0.00 full-time positions for the Department of Health and Welfare (DHW) for the Division of Medicaid for fiscal year 2027. This legislation appropriates a total of $5,477,566,400 and 303.50 full-time positions to the agency.
Analyst Note: SoP total, ongoing, and onetime spending amounts currently do not align with IFF’s understanding of enhancement structure. The correct total is in Table 2.
Rating: -4
Is the continuation or growth in ongoing spending, if any, inappropriate for the changes in circumstances, scope of the agency, or current economic environment? Conversely, is the continuation or growth in ongoing spending appropriate given any change in circumstances or economic pressures?
This legislation authorizes an ongoing spending enhancement for the Division of Medicaid of $365,632,300, adding onto last year’s (FY26) increase in ongoing spending of $556,992,200. FY26’s ongoing spending is wrapped into FY27’s base increase, making ongoing spending especially important to scrutinize. Volatility in these increases (or decreases) is to be expected, and makes discernment on the propriety of new spending imperative.
This legislation includes several ongoing enhancements. The first of these is the Estate Recovery System ($2,496,600 D/FF), the second is Medicaid Program Integrity ($935,000 D/FF). These recover costs and cut down on waste, fraud and abuse. The third is for the Division of Purchasing - Medicaid ($79,800 FF).
The next enhancement is the Hospital Assessment Fund Alignment and Program Creation. This combines (net zero) federal and dedicated funds into one account, and breaks this spending out from the other four medicaid buckets. This account is appropriated at a total of $601,781,000 (D/FF).
(0)
The last ongoing enhancement is Population Forecast Adjustments ($387,122,100 D/FF), including $98 million in general funds. The population and cost growth in Medicaid programs is on an unsustainable course. This enhancement alone is enough to fund dozens of other state agencies and programs.
(-1)
Does this budget incur any wasteful spending among discretionary funds, including new line items? Conversely, does this budget contain any provisions that serve to reduce spending where possible (i.e. base reductions, debt reconciliation, etc.)?
This legislation authorizes onetime spending for the Division of Medicaid of $127,722,500, adding additional expenditures after last year’s (FY26) onetime spending of $3,578,300. Onetime spending is often even more volatile than ongoing spending, which is to be expected due to the onetime expenses generally being utilized for projects or capital outlay. This also calls for special scrutiny and discernment.
This ongoing expenditure consists of one enhancement. This is the MMIS Procurement Year 4 contract ($102,721,300 D/FF). The MMIS implementation contract has been plagued by delays in court, among other problems. Yet this is year four of a five year contract.
(0)
In addition, this legislation includes an FY26 supplemental of $107,244,000 (G/D/FF). This was partially offset in S1331, which codified the 4% provider rate reduction to medicaid. However, even accounting for this (which is outside the scope of this legislation), the increase is over $45 million. This is unsustainable.
(-1)
Does this budget perpetuate or expand state dependence on federal dollars, thereby violating principles of federalism? Conversely, does this budget actively reduce the amount of federal dollars used to balance this budget?
This legislation appropriates $291,676,600 in new federal enhancements to the agency for replacement items and the above mentioned grants. This represents a commitment to continued reliance on borrowed federal dollars, deepening the dependence on the federal government and violating the principles of federalism.
(-1)
Does this budget contain hidden fund transfers or supplemental expenditures that work to enact new policy or are not valid emergency expenditures? Conversely, are fund transfers only made to reduce budget expenditures or taxes, or are supplemental requests only made in the interest of resolving valid fiscal emergencies? Does this budget abuse continuous funding or obfuscate the appropriations process? Conversely, does it reduce the use of continuous funds or clarify the appropriations process?
This budget establishes a new framework for the hospital assessment fund. An improvement is that the hospital assessment fund is now shown as one of the five (formerly four) major funding buckets along with the four medicaid plans. However, this fund is also considered all dedicated funds, despite a large portion coming from federal funds, obscuring the number of federal dollars coming into the state to the tune of at least $349,701,600. The continued shift of state and federal dollars into dedicated funds greatly obscures the appropriations process and the degree to which Idaho relies on federal dollars.
(-1)
