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Idaho Medicaid budget rises; department seeks supplementals and ongoing increases
Summary
Legislative analyst and Department of Health and Welfare staff detailed fiscal-year 2025 supplementals and 2026 enhancements for Idaho Medicaid, citing pandemic-era impacts, provider rate increases and forecasting changes as drivers of higher costs.
The Joint Finance-Appropriations Committee heard Feb. 26 that Idaho’s Medicaid program is requesting multiple supplemental and ongoing budget increases to cover recent costs and anticipated growth.
Alex Williamson, budget and policy analyst with Legislative Services, told the committee the Division of Medicaid expended about $4,270,000,000 of the $4,560,000,000 appropriated in fiscal 2024, and presented five supplementals and several 2026 enhancement requests. “This will probably feel like information overload,” Williamson said as she introduced the materials.
Why it matters: Medicaid is the state’s largest health-care expenditure and a joint state–federal entitlement program. The department and the analyst said a mix of factors has driven costs above previous forecasts: implementation of Medicaid expansion, the COVID-19 public-health emergency, provider rate increases passed by the Legislature, changes to upper payment limit (UPL) calculations and population growth.
Key supplemental and enhancement requests described to JFAC: - External quality review (EQR) supplemental: Williamson said the department requests a one-time amount of $1,300,000 to meet the Centers for Medicare & Medicaid Services requirement for external quality reviews of managed care plans (behavioral health, dental and two dual-eligibility MCOs). The department reported failed RFP attempts and a higher market price than historically paid.
- Idaho Behavioral Health Plan (IBHP) system configuration supplemental: Williamson described a supplemental to cover system configuration and onboarding work tied to the new IBHP contract; transcript figures included a $1,350,000 figure tied to the request and a referenced $695,500 one-time component for configuration work (recorded language in the hearing was not fully consistent on the split).
- Capitation rate increase (one-time): Williamson said a one-time federal-funded capitation-rate increase for managed-care plans of about $108,800,000 (federal) is requested; she provided a breakdown showing roughly $33,000,000 in the expansion plan and the remainder split across coordinated, enhanced and basic plans.
- Hospital assessment supplemental: A requested $190,000,000 (trustee/benefit payments) tied to changes from Senate Bill 1350 (2022) and updated UPL calculations; Williamson said $77,000,000 would be from the hospital assessment dedicated fund and $113,000,000 from federal funds.
- MMIS (Medicaid Management Information System) procurement: The department requested ongoing and one-time amounts for the multi‑year MMIS procurement; Williamson told the committee the state portion is $11,700,000 (already set aside in the MMIS dedicated fund) and the federal portion is about $105,000,000 for the current phase of a five‑year process.
Ongoing requests listed in the budget book include a $67,600 ongoing request for required Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, $200,000 ongoing for work tied to the KW lawsuit settlement (HSRI contract and attorney fees), $1,100,000 ongoing for expanded actuarial services, and an ongoing $1,350,000 line for the EQR contract (the analyst noted a budget-book typo that showed that item as one‑time).
Williamson also said a population-forecast adjustment (often called non‑discretionary adjustment) would add roughly $367,000,000 to the Medicaid baseline; that number includes a projected shift of about $45,000,000 from federal funds to the general fund because of a federal medical assistance percentage (FMAP) change.
Department response and context: Director Alex Adams said the department submitted “as close to a maintenance budget as I could submit” and characterized many requests as federally required or legally compelled (for example, EQR/CAHPS and actions tied to court orders). Adams and deputy director Juliette Sharon emphasized that some items are costs already incurred (supplementals) while others are ongoing program and compliance costs.
What the committee asked: Legislators pressed for clarifications on whether certain items are one-time or ongoing, why previous RFPs failed, and how forecasts diverged from actual spending. Williamson and department staff repeatedly encouraged members to consult the expanded slide decks on SharePoint for detail and to follow up with staff for technical clarifications.
Ending: The department said it is beginning to publish more frequent transparency reports and intends to provide range-based forecasts (baseline/optimistic/pessimistic) to give lawmakers earlier signals about likely supplemental needs or reversions.
