IDHW director faces scrutiny over Medicaid budget
By Melissa Davlin, Idaho Reports
In a lengthy presentation spanning two hearings, Idaho Department of Health and Welfare Director Dave Jeppesen sought to reassure the legislature’s joint budget committee that he was dedicated to reducing costs in the state’s Medicaid program.
For the upcoming fiscal year 2024, Gov. Brad Little is recommending $4.7 billion for the Medicaid program, a 17% increase from the current year. Of that, $3.1 billion is federal funding; the rest comes from the state.
The $4.7 billion would be $1 billion more than the state spent on Medicaid in fiscal year 2022.
There are multiple reasons for the increase in costs, Jeppesen told members of the Joint Finance Appropriations Committee during presentations on Tuesday and Wednesday. The national public health emergency prohibited states from removing people from Medicaid rolls, even if they no longer qualified for Medicaid.
Jeppesen told the committee that 450,000 Idahoans are currently enrolled in Medicaid, including those eligible under Medicaid expansion, a program that allows people younger than 65 years old who are under 138 percent of the poverty level to enroll in Medicaid. Others who are eligible for Medicaid include people 65 years and older who meet certain income requirements, pregnant women who are under 138 percent of the poverty level, and people with disabilities.
Of those 450,000, the department estimates 300,000 are still eligible for Medicaid, based on continuous contact they maintain with enrollees.
The department is starting the process of re-evaluating the remaining 150,000 to see who is no longer eligible because of increased income levels or other factors. The state can remove ineligible people from Medicaid starting April 1, and Jeppesen said he hopes the department will finish the audit by August.
Under Medicaid expansion, the federal government pays 90 percent of the costs for care, while the state picks up the rest of the tab; The public health emergency temporarily increased the federal share. Nationwide, Medicaid enrollment went up 28 percent in two years, partly due to continuous enrollment and partly because of economic conditions during the beginning of the pandemic.
Idaho voters approved Medicaid expansion in 2018 after a skeptical legislature declined to do so for several years. In December, new House Health and Welfare chairman Rep. John Vander Woude, R-Nampa, told Idaho Reports reducing Medicaid costs was a priority for him, though he said repealing Medicaid expansion wasn’t likely on the table.
Jeppesen told the committee that other factors in the expanding budget request include an increase in cost for certain kinds of care, plus an increase in the costs of caring for patients with complex chronic illnesses.
Jeppesen also pointed to cost containment measures the department is already tackling, including an audit to identify potential savings. The final audit is due in August, though the Division of Financial Management provided IDHW with an interim report last week that identified short-term cost savings that the state can implement immediately.
The department has also implemented a program that would shift extra costs to medical providers if they go over the initial estimate to provide care for a patient.
“That’d been a long and difficult conversation, because we’re asking doctors to take financial risk,” Jeppesen said. But, he added, private insurers already ask medical providers to absorb costs if they go over the estimate.
Throughout the budget hearings, which included presentations on child welfare, psychiatric services, and mental health programs, Jeppesen fielded pointed questions about the department’s costs, particularly as they related to Medicaid. Committee members also asked what the department is doing to help Idahoans become more independent and no longer reliant on public services.
“We’re seeing this budget grow continuously throughout the years,” said Rep. Josh Tanner, R-Eagle. “How are we realistically going to curb this so it’s sustainable for Idaho? Because at this growth rate… it’s growing faster than even our state can grow.”
Committee co-chair Rep. Wendy Horman, R-Idaho Falls, asked Jeppesen to provide the committee with more information on the interim cost-control audit.
“This is… what I view as an urgent problem,” Horman said. “This is an unsustainable trajectory.”
“I just want to emphasize, it’s important to us too,” he said, adding IDHW doesn’t have much control over the federal portions of the program. “These things that are in our control, we need to take action on them, and we’re serious about that.”
IDHW’s budget presentation is scheduled to wrap up on Thursday morning.
• Children account for 51 percent of the Medicaid population in Idaho.
• About 60 percent of the Medicaid budget goes to providing medical care.
• The remaining 40 percent goes to programs like services for developmentally disabled patients, as well as paying care providers.
• Those enrolled in Enhanced Medicaid – Medicaid for those with disabilities or special health needs – make up 12 percent of Medicaid enrollees and account for 32 percent of the costs.
Source: Idaho Legislative Services Office Division of Budget & Policy Analysis