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The story about Medicaid you have not heard

The story about Medicaid you have not heard

Fred Birnbaum
January 16, 2024
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January 16, 2024

Breaking news you won’t get from the legacy media: Conservatives in the Idaho Legislature were correct to reject Idaho’s two separate Medicaid budgets last session. Why? The Medicaid department is sending back — “reverting” — $278 million to the General Fund, meaning that that budget was over-appropriated. To put this error in perspective, consider that the error is nearly three times the total budget for the Idaho State Police. 

It’s too bad that the government kept this money for a year instead of returning it to taxpayers.

Medicaid is Idaho’s largest single government program and has the largest budget of any program. At nearly $4.7 billion for Fiscal Year 2024 (FY24), it represents 34% of the entire state budget for all programs including all federal funds. So, you would think that this budget would get the most scrutiny. The history is that, apart from a couple of close votes, including in the 2021 session when Senate Bill 1185 to fund Medicaid at $3.7 billion, it hasn’t. That Medicaid bill passed the House by a margin of only 36-34, the FY22 budget. That budget has now grown by nearly $1 billion in two years. 

The 2023 session was different for a lot of reasons. After a hard-fought battle in the Joint Finance and Appropriations Committee (JFAC), House Bill 334 (H334) emerged and fully funded the Medicaid department with no consideration given to the fact that tens of thousands of recipients who were added during COVID were deemed ineligible. Supporters of the budget, including Representative Furniss, insisted that any savings would have to accrue to the FY25 budget and that providers had a year to bill and collect. Never mind the tens of thousands of people who were removed from the rolls. However, an analysis provided by the Medicaid Administration demonstrated that for the last three years, about 90% of claims for payment were received within two months of the service date. 

Why does all of this matter?

Well, the House rejected the FY24 original Medicaid budget by a vote of 34-36. And then came the revised budget bill, H369, which was about $150 million smaller than H334. The revised budget passed 40-30 with an unusual mixture of 19 conservatives, voting no, who correctly believed it was too large and some liberal Republicans and all Democrats who believed it was too small. In the Senate, the bill passed by one vote, with a similar coalition of conservatives voting no because it was too big and liberals voting no because they wanted more money. Senator Herndon led a spirited debate, but the bill passed 18-17.

Who was right? The conservatives.

As part of the FY24 budget review, the Medicaid department and the Governor recommend a “recission,” or reversion of nearly $278 million to reduce the current FY24 Medicaid budget. So, the final budget for FY24 is likely to be over $400 million lower than the original agency request and the Governor’s recommendation. The reason for the reduction is simple: thousands of people were on Medicaid who were not eligible, and a proper budget should have reflected this. 

Only three members of JFAC held out in the final vote for a lower budget, Representatives Tanner and Lambert and Senator Herndon. 

So, when the debate begins on the FY25 budget, those three legislators on JFAC and all the other conservatives who voted against the budget absolutely have the edge when it comes to credibility and the guardianship of your tax dollars. They were right all along.

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