JFAC approves $415.2 million in FY2025 Medicaid supplementals and $674.2 million in FY2026 Medicaid adjustments

The Joint Finance-Appropriations Committee (JFAC) voted to approve one-time fiscal year 2025 supplementals totaling $415,226,800 and an FY2026 package of Medicaid adjustments and ongoing appropriations totaling $674,192,600 during a committee session discussing the Department of Health and Welfare's Division of Medicaid.

The FY2025 action included funding the federally required managed care external quality review (EQR), system-configuration costs for the Idaho Behavioral Health Plan (IBHP), an updated Medicaid forecast, a capitation rate increase for IBHP, and a hospital assessment fund deposit that allows the state to draw federal upper payment limit dollars. Senator Wintrow moved the FY2025 supplemental and Representative Handy seconded it; the motion passed by a committee majority (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). The committee reported the motion will go forward as a bill with a “new pass” recommendation.

Alex Williamson, budget and policy analyst with Legislative Services, told the panel the EQR is a federal requirement for states with managed care organizations and that Idaho is requesting $1,350,000 to meet that obligation. She described the Medicaid forecast supplemental as reflecting updated expenditures and asked for $113,849,300 to cover entitlement program costs for the remainder of FY2025. Williamson also said additional funds—$108,821,400—were requested to cover a higher-than-expected capitation cost for the Idaho Behavioral Health Plan and that $77,243,700 in dedicated hospital assessment deposits would allow the state to draw down federal matching funds under the upper payment limit methodology.

The FY2026 package that the committee approved would convert several of the one-time FY2025 items to ongoing funding and add new baseline appropriations. Representative Furness moved the FY2026 package, which was seconded by Senator Burkey and approved by the same committee majority (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). Key FY2026 amounts adopted by motion include:

- $190,510,600 ongoing for the hospital assessment fund; - $67,600 ongoing for additional CAHPS survey contracts required by federal Medicaid rules; - $200,000 ongoing for the adult developmental disabilities resource-allocation model tied to the KW lawsuit settlement; - $1,100,000 (split half federal, half general) to amend the actuary contract; - $1,350,000 ongoing for the external quality review contract; - $117,200,400 for the Medicaid Management Information System (MMIS) procurement (state share already set aside in a dedicated fund); - $376,124,900 for population-forecast adjustments that reflect caseload, utilization and the FMAP change; - 3 full-time positions and $3,539,100 general fund to move the Extended Employment Services program into the Division of Medicaid; and - a reclassification of $1,500,000 from trustee and benefit payments to operating expenditures to implement House Bill 345 (net zero department-wide for that change).

Representative Furness summarized the FY2026 net request as $70,141,900 from the general fund, $88,963,700 from dedicated funds, and $515,087,000 from federal funds, for a total of $674,192,600. Williamson explained the population-forecast adjustment reflects expected changes in caseload, utilization and provider payment rates rather than changes to covered services.

Members pressed staff on several points during discussion. Senator Cook asked why the legislature relies on external actuaries; Williamson replied that “the division of Medicaid does not currently have any actuaries on staff in house, and so they are completely reliant on an actuarial firm providing these services.” Senator Cook added that actuarial support is essential for forecasting and capitation-rate work. Senator Wintrow and others noted that much of the FY2026 increase is driven by hospital assessment and rising utilization and costs in health care; Representative Furness said the House-passed House Bill 345—which has fiscal trailers incorporated into the budget language—remains contingent on obtaining required federal waivers.

The committee also adopted budget language by unanimous consent that directs the division to study and report on program design choices and adds reporting requirements. The adopted language requires the Division of Medicaid to:

- explore a value-based payment model for outpatient addiction treatment and report findings to JFAC by Jan. 15, 2026; - transition Medicaid contract periods to align with the state fiscal year and report progress to JFAC by Jan. 15, 2026; and - provide an annual emergency Medicaid program report to JFAC after the close of each fiscal year no later than Sept. 15.

Senator Wintrow and others cautioned that the new reporting requirements will add to staff workload without additional staff dollars. Director Adams and staff acknowledged the department’s expanded reporting duties during the hearing.

Votes at a glance: FY2025 Medicaid supplementals — Motion (Sen. Wintrow); second Rep. Handy; outcome: approved (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). Total one-time addition reported by staff: $415,226,800. FY2026 Medicaid program adjustments and ongoing appropriations — Motion (Rep. Furness); second Sen. Burkey; outcome: approved (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused). Total ongoing and one-time adjustments reported by staff: $674,192,600.

The committee chair directed staff and legislators to coordinate with work groups to finalize technical edits and to move the measures forward as fiscal bills. Both the FY2025 supplemental package and the FY2026 adjustments were reported out with a “new pass” recommendation to proceed through the legislative process.