Senate passes bill to make changes to Medicaid

BOISE — The Idaho Senate around 6 p.m. Tuesday suspended its own rules to be able to more quickly take up a major Medicaid reform bill. The bill passed on party lines after nearly 30 minutes of debate.

House Bill 345, which makes several changes including shifting administration of Idaho’s entire Medicaid program to a third-party organization and implementing work requirements for some participants, was first introduced Feb. 28 and swiftly made its way through both chambers. It will now go to Gov. Brad Little’s desk for consideration.

Senate sponsor Sen. Julie VanOrden, R-Pingree, said Tuesday night that bill was the “culmination of debate that’s been ongoing since the beginning of the session.”

She referenced two bills introduced earlier this year in the House that would have repealed Medicaid expansion — a program approved via initiative by Idaho voters in 2018 that allowed for health care coverage to those who made too much money to qualify for traditional Medicaid — in an effort to reduce costs.

“At its core, this bill strikes a balance between financial accountability and protecting the safety net for Idahoans,” VanOrden said.

The bill would require the Idaho Department of Health and Welfare to shift administration of Idaho’s entire Medicaid program to a third-party managed care organization, known as an MCO.

It also repeals the entirety of the health department’s administrative rules over several Medicaid programs, which prompted deep concern among individuals with disabilities who rely on the services that fall under those rules, the Idaho Press previously reported.

Other changes include implementing a work requirement on Medicaid expansion participants, requiring participants to pay premiums and co-pays, ending the practice of automatically renewing eligibility based on information the department has from other programs, and giving the health department director broad authority to start cutting costs in the event the federal government reduces its payment match on expansion while the Legislature is out of session.

Sen. Glenneda Zuiderveld, R-Twin Falls, argued she would rather have seen the bill that would have almost certainly repealed Medicaid expansion, but that she would still support HB 345 in order to try and find some savings in the program.

Senate Minority Leader Melissa Wintrow, D-Boise, argued at length about the potential cost increases she could see happening if the bill passes, including the costs to oversee and enforce work requirements and to administer managed care.

Wintrow cited Idaho’s $1.2 billion contract with the MCO Magellan of Idaho to oversee its behavioral health plan, and how it costs the state $50 million just for administration.

“This is going to pass. I know that,” Wintrow said, while debating against the bill for a second time Tuesday evening, “but I am asking this body to please be vigilant in the monitoring of these kind of contracts, because when we say we’re going to take on an MCO model, I mean, that is gargantuan.”

She also cited that when other states implemented work requirements, such as Arkansas or Georgia, they saw large administrative costs to oversee those programs.

Another concern Wintrow had was that the health department director would be given authority to cut Medicaid expansion under the bill if the federal government reduces the percentage it pays for services while the Legislature is out of session.

The bill would require the department to “take any action necessary to offset the increase in state funding,” which could include reducing provider payments or eliminating optional benefits.

Wintrow noted that most of Medicaid is considered an “entitlement,” which means the government must provide the service to those who qualify, but that Medicaid expansion might not fall under that and could be considered optional.

Sen. Carl Bjerke, R-Coeur d’Alene, co-sponsored both the bill that would have trigged a repeal of Medicaid expansion and HB 345, and he said the bill provided “more than a balance.”

“I think this is a great way for us to act,” Bjerke said.

He noted that the switch to managed care will likely take years and will be overseen by a recently formed Medicaid legislative review panel.

As of October, there were 294,664 Idahoans enrolled in all of Medicaid, and as of February there are more than 83,000 people enrolled through expansion.

The total Medicaid budget, including federal funds, sits at nearly $5.3 billion — the state’s general fund share would be around $996 million in total for the upcoming fiscal year, based on the governor’s recommended budget.

The Medicaid expansion portion of the budget is about $1.4 billion in both state and federal funds, with the federal government covering 90% and the state covering the remaining 10%.

VanOrden noted that the bill requires that providers and participants be involved in the design of the managed care plan.

“There is a lot to do,” VanOrden said. “There’s a lot of people to be involved, and I assure you, there will be a lot of eyes on these.”

The bill passed 29-6 to go to the governor’s desk.

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.

How they voted

Yes: Dan Foreman-R, Phil Hart-R, Keith Markley (substitute for Cindy Carlson-R)