A problem too big to ignore

What government-run medical welfare means for Idaho

There is no federal law that requires states to run a government medical welfare program, and if ever there was a time for Idaho to consider opting out of doing so, this is it.

Photo by Alexander Grey on Unsplash

To be clear, I don’t expect lawmakers or Gov. Brad Little to propose something so bold as to opt out of Medicaid. I just point out the legal reality because the situation for this program is so dire that if nothing is done to contain Medicaid it will eventually consume every single dollar of new revenue the state brings in from income and sales tax collections. This means each year, when lawmakers meet to consider state spending, there will be no money available to add to public schools, roads, police or prisons, unless a decision is made to raise taxes.

That’s looking down the road. For right now, however, once again, the state faces a big, unexpected bill when it comes to Medicaid, the program for the state-federal partnership that used to be exclusively for the poor and disabled and now has been extended to cover working, able-bodied, childless adults.

The state Department of Health and Welfare just reported that it faces a $60 million shortfall in the Medicaid program and may ask state lawmakers for more money come January. This shortfall would be worse but not for Little’s budget holdback, which the department met by reducing Medicaid provider payments by 4%.

It’s also important to understand that even though the Department of Health and Welfare has ordered cuts to providers, the federal government still must approve those cuts. And there’s no guarantee that will happen.

Even still, multimillion dollar emergency spending requests for the Medicaid program are par for the course. I remember that 20 years ago, Idaho lawmakers were frustrated that Idaho’s out-of-control spending resulted in the need to plug a $15 million hole in the Medicaid $226 million general fund budget.

At that point, the Legislature’s budget committee momentarily refused to authorize the additional spending until the agency imposed reforms to the system.

Sen. Brent Hill, a Republican from Rexburg who later became the Senate president pro tem, led the charge to withhold the additional funding. He said at the time that Medicaid “is taking from every other program we have in the state. Because of the increase in the Medicaid budget, we are taking from child protection, substance abuse, domestic violence, education — from all of these other programs.”

But it wasn’t long before Hill and other legislators relented, enough to allow Medicaid to return to business as usual.

Over the years, lawmakers have been presented with numerous options to permanently cut Medicaid, but no one has really been willing to do this. There are, in fact, a number of medical services that states like Idaho provide via Medicaid, even though they’re optional services that are part of the optionally-offered Medicaid program. For example, the Medicaid prescription drug benefit — one of the program’s biggest expenses — is not mandated to states that participate in the medical welfare program.

Today, assuming the emergency spending request is approved in the upcoming legislative session, Medicaid’s cost to state taxpayers will top $1 billion. The program’s total spending will be nearly $5.3 billion. Compare that to public education, a requirement of the state constitution, which costs $3.1 billion, with the majority of those funds coming from state taxpayers.

Here’s the thing that gives me some hope: It’s not 2005. By my count, there are probably enough votes on the Legislature’s 20-member budget committee to keep lawmakers from adding money to the Medicaid budget unless serious changes or cuts are enacted. This might include repeal of the prescription drug benefit or even repealing the Medicaid expansion voters approved in 2018.

These might not be easy things to do. But the reality is that Medicaid, in its present form, is not sustainable. If you think the state should be putting more money into public schools, prisons, drug rehab programs or even filling the pothole in front of your house, the reason it cannot do those things is tied up in one word: Medicaid. Doing nothing has been the preferred option for lawmakers for more than two decades.

It might not be that way much longer, if for no other reason than because the problem is becoming too big to continue to ignore.