Budget writers approve Medicaid funding

BOISE — The state budget writers passed the largest budget this year, with members narrowly advancing Medicaid appropriations Monday.

The Joint Finance and Appropriations Committee (JFAC) voted to approve $674 million in state and federal funds for the Medicaid program’s “enhancement budget,” which includes new spending for fiscal year 2026. The budget includes a projected $15.9 million in anticipated net savings from the passage of House Bill 345, a sweeping Medicaid reform bill.

The budget-writing committee previously passed a slate of “maintenance budgets,” which included ongoing expenses from the prior year; the health and human services maintenance budget, which included Medicaid appropriations, passed the Senate and awaits a vote in the House.

The total Medicaid budget comes to around $5.2 billion of state and federal funds, with about $994 million of that coming from state general funds. The large budget is often one of the most contested, with some arguing it is ballooning out of control and others noting that the state is required to fulfill the services and pay the bills for those services.

Rep. Rod Furniss, R-Rigby, said the budget includes numbers related to a higher cost of utilization — meaning more people seeking services or higher-cost services — and higher costs from hospitals.

“This budget helps people that are indigent, it helps mothers that are pregnant, it helps disabled people and children,” Furniss said. “Unfortunately, this is a budget that we really need to take care of our people, and sometimes we forget that.”

Monday’s meeting came with frequent reminders that the items in the budget were required to be paid.

Sen. Kevin Cook, R-Idaho Falls, highlighted that Idaho Health and Welfare Director Alex Adams has said multiple times that the budget has grown because he’s following the law.

“If we wanted to really lower that budget, that would be up to us as doing the statute,” Cook said.

He spoke in favor of House Bill 345, which would make a number of changes to Medicaid including moving the administration of the entire program to a third-party managed care organization, or MCO, and seeking permission from the federal government to add work requirements to the Medicaid expansion population. The bill awaits a signature from the governor, as of March 14.

Cook said it may take a number of years for the managed care aspect of the bill to have the intended results of reducing costs.

“We need to make sure we’re rolling up our sleeves and we’re going to work and we’re going to help out on this and make it happen,” he said. “And it will be a huge amount of work.”

The Department of Health and Welfare is expecting $15.9 million in savings from the bill, which is based on ending the program’s primary care case management program as well as value-based care, which are the programs by which the state currently administers Medicaid, according to an IDHW spokesperson. HB 345 would direct the agency to end those programs and move to managed care.

Committee co-Chairperson Sen. Scott Grow, R-Eagle, said JFAC is “not a policy committee” and is tasked with funding the policies approved by the rest of the Legislature.

The committee approved the budget with a total vote of 13-4; in a recently implemented process, the joint committee requires at least six votes from each chamber to pass, regardless of how many members are present that day. The budget passed 7-3 on the Senate side, and 6-3 with one member absent on the House side.

Committee members Monday also passed the supplemental budget for the Division of Medicaid, which includes adjustments for the current fiscal year.

The supplemental requests from Medicaid totaled $511,400 in state general funds and $337.4 million in federal funds.

“These are bills that have already accrued and that we need to pay,” Senate Minority Leader Melissa Wintrow, D-Boise, said after making the motion to approve the budget.

The supplemental costs also passed in a 13-4 vote.

Lawmakers are nearing the targeted date for adjournment of the 2025 session, but they must pass a balanced budget before they head home for the year. There are still a number of outstanding budgets, including the second-largest total budget, public school support.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.