Available Soon: Request your printed copies of the Idaho Freedom Index mailed to you!
Request Your Copies
Note to Dustin: This is currently only visible to logged in users for testing.
Click Me!
video could not be found

Task force fails to offer solutions for Medicaid as program costs projected to soar

Task force fails to offer solutions for Medicaid as program costs projected to soar

Niklas Kleinworth
December 1, 2023
Author Image
December 1, 2023

The Medicaid Managed Care Task Force released its final report this week detailing how it plans to curb Idaho’s oversized spending on medical welfare. But it offered no solutions, paying no mind to controlling the rampant costs of the program.

The task force merely offered to sustain the existing structure of Idaho’s Medicaid program. The only lasting change they suggested was the creation of new quality measures for the program that a new, permanent joint committee enforces.

These recommendations diverge from the original mission, ignoring a key provision of their enacting legislation to reduce costs. The recommendations also delay real solutions that would require cutting the cost of services, reducing the use of services, or lowering enrollment.

The task force was originally established to examine solutions that would — among other things — reduce costs, provide transparency, achieve budget predictability, and improve healthcare outcomes. Its primary goal was to consider whether Idaho should switch from a blend of funding models — including fee-for-service, value-based pricing, and managed care — to a comprehensive managed care model.

It is good that the task force decided against switching to a managed care system. It would have been a solution without results as managed care struggles to control Medicaid spending and improve services any better than alternatives.

Nationally, there is little evidence that the managed care model improves budget predictability over time or reduces the cost of services. The model’s design ignores many of the leading drivers of the cost of the Medicaid program, including growing enrollment, a lack of system integrity, and increased use of services like those for prescription drugs.

Given these issues with managed care, the task force could not come to a consensus on its adoption. But taxpayers should also be concerned about maintaining the status quo.

Program spending continues to skyrocket as the preliminary budget request for Medicaid exceeds $4.7 billion in fiscal year 2025. This is an increase over last year’s budget despite projected savings of $245 million from cleaning about 100,000 ineligible beneficiaries from the rolls.

This potentially record-breaking figure also doesn’t even consider plans to grow the program. Stakeholders hope to pass legislation to significantly expand postpartum coverage — an initiative where the real costs are largely still unknown.

Additionally, the costs and use of existing services continue to rise. Prescription drugs continue to be the fastest-growing spending category in the program. This is largely driven by the expansion population, with prescription drug claims growing 50% faster than enrollment in this group.

In fact — beyond their effect on pharmaceuticals — Medicaid expansion to able-bodied, working-aged adults continues to be the largest driver of costs in the program. Funding expansion drove 55% of the $1.6 billion in spending growth over the last five years. 

The rapidly growing cost to cover able-bodied, working-aged adults harms other coverage populations. The demands of the expansion population shift resources from the truly needy and negatively impact health. The continued expansion of the welfare state would further reduce the effectiveness of this already low-value program.

The task force is also cautiously recommending the continuation of Idaho’s value-based pricing to control spending. This program was launched in 2020 as a way to control costs and improve quality, but Idahoans have yet to see these results. With this in mind, the recommendations also call for a new, permanent study committee to inspect managed care and value-care contracts and set quality standards.

However, Idaho already has quality metrics in place through the value-based system itself. Adding more quality metrics, in themselves, will not reduce the cost of a program or improve its quality. Rather, the response to the program failing quality metrics is what really makes the difference. Idahoans already know Medicaid is failing to meet cost and quality standards. It is time for the Legislature to act on this information.

True cost control, budget stability, and program improvement can only be achieved through lowering the cost of services, reducing the amount of use in the program, or lowering the number of people enrolled. These initiatives would require considering solutions like the repeal of Medicaid expansion, addressing program integrity and improper payments, and reducing the high use of services like prescription drugs. 

But none of these approaches were considered. The task force focused on sustaining the program rather than finding ways to reduce welfare dependency and render the program obsolete.

It seems the task force was never intended to truly reduce the costs of Idaho’s medical welfare program. The choice between staying the course and transitioning to managed care was two paths to the same end: more government, less independence, and higher costs.

For real change to occur, it is time for the Legislature to stop procrastinating by studying Medicaid and surveying contracts. Lawmakers must act to promote personal agency and shrink the welfare state. This is the only path to truly reduce costs and improve the health of Idahoans.

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
COPYRIGHT © 2024 Idaho freedom Foundation
magnifiercrossmenucross-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram