Medicaid costs meeting Jared Tatro

Legislative budget analyst Jared Tatro, right, presents information to the Legislature’s interim committee on Medicaid funding on Friday at the state Capitol. Tatro examined how the 36 other states that have expanded Medicaid have funded their state share of the costs.

BOISE — After hours of discussion, a divided legislative panel charged with finding “equitable” ways to fund Medicaid expansion in Idaho has voted along party lines to ask Idaho counties to kick in up to $10 million next year.

The idea is that counties won’t need to spend as much on county medical indigency expenses — which come out of local property taxes — once Medicaid is expanded. Opponents suggested local property tax relief would be a better use for those savings, and argued that Idaho doesn’t yet know how the expansion will impact county finances a year from now.

“The committee’s recommendations would shift the state’s responsibility for the Medicaid match onto property taxpayers,” said Sen. Maryanne Jordan, D-Boise. She proposed an unsuccessful motion to wait a year to see how county costs change, and then consider the issue.

Majority Republicans on the House-Senate panel backed proposals from Co-Chairman Sen. Jim Rice, R-Caldwell, to ask the counties for up to $10 million in fiscal year 2021, which begins July 1, 2020, with several caveats. The counties might not have to contribute until their fiscal year starts Oct. 1. They’d make their contribution by giving up a percentage of their state sales tax revenue-sharing distribution, rather than directly from property taxes, but only if the existing charitable and justice levies now charged to county property taxpayers are combined. And if any county experienced a spike in medical indigency costs in fiscal year 2021, it wouldn’t have to pay a full share, with the state instead filling the gap from its tobacco settlement Millennium Fund.

Rice’s complex proposals drew questions, but only the panel’s two minority Democrats voted against them. Several said the amount was lower than the $20 million they’d anticipated seeking from counties next year.

Idaho voters approved Medicaid expansion last November; it takes effect Jan. 1. For the first six months, it has been funded at no cost to the state general fund, drawing roughly $10.8 million from the Millennium Fund and the rest from savings the state will realize in programs from Corrections to Health & Welfare thanks to the expansion. The federal government pays for 90% of the costs of expanded Medicaid, which covers people who make between 100% and 138% of the federal poverty level; the legislative panel was just looking at funding sources for the state’s 10% share moving forward after next July 1, which is estimated at around $41.9 million for the full budget year.

Friday’s votes were on which pieces the group wanted included in draft legislation that it will review at its next meeting. Once that’s finalized, committee Co-Chairman Rep. Fred Wood, R-Burley, said, the panel would make a recommendation to the full Legislature. “The only thing we’re going to do here is recommend,” he said.

All committee members voted unanimously in favor of two motions: One to use any savings to the state general fund as a result of expanding Medicaid to fund the expanded program; and another to do the same with any related savings in the state’s Catastrophic Health Care Fund in fiscal year 2021.

Legislative budget analyst Jared Tatro briefed the committee on how other states fund their state share of Medicaid expansion costs.

“94.4% of the states that have expanded rely on their general fund to cover at least part of it,” Tatro reported.

About half of those used state general funds only; the others used it plus another funding source, he said.

Among the other funding sources: A dozen states of the 36 that have expanded Medicaid have increased or modified their assessments on providers to help cover the state’s share of Medicaid expansion; most of those increased the assessments on hospitals. Five states opted for a tax increase or a redistribution of an existing tax; California and Indiana tapped cigarette and tobacco taxes; Oregon, legal marijuana sales taxes; Utah, a 0.15% sales tax increase that voters approved; and New Hampshire, liquor taxes. Montana voters considered a tobacco tax increase, and rejected it.

At least eight states imposed premiums or co-pays, but in many cases, they cover little of the costs and were more of a personal responsibility tool than a funding mechanism, Tatro reported.

Four states hoped to use savings from people leaving Medicaid as a result of failure to satisfy work requirements, Tatro reported, but “no state has been able to actually implement its work requirements program plan without legal challenges.”

At least five states, including Idaho, have tapped tobacco settlement funds from a major multistate tobacco lawsuit; that’s the source of the funds in Idaho’s Millennium Fund. Idaho chose to invest those funds in an endowment, so it’s able to spend the earnings each year.

At least two states have imposed a new tax on HMOs or health insurance plans. North Dakota reduced the rates paid to providers for health care.

Wood said the Department of Health and Welfare is requesting to fund Medicaid in fiscal year 2021 with Millennium funds and general funds including offsets from savings.

Betsy Z. Russell is the Boise bureau chief and state capitol reporter for the Idaho Press and Adams Publishing Group. Follow her on Twitter at @BetsyZRussell.

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