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

At a meeting of the Joint Finance‑Appropriations Committee, members approved a FY2025 supplemental package totaling $415,226,800 to cover Medicaid obligations and a separate FY2026 set of program maintenance and enhancements totaling $674,192,600.

The FY2025 supplemental motion included one‑time funding for a federally required managed‑care external quality review (EQR), implementation costs tied to the Idaho Behavioral Health Plan, an updated Medicaid expenditure forecast, a capitation‑rate increase for the behavioral‑health plan, and additional hospital assessment funds to draw down federal matching dollars.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee that the managed‑care EQR is a CMS requirement for states with managed‑care organizations and that Idaho’s request reflects current obligations for four plans. She said of capitation rates for the behavioral‑health plan, “The capitation rate is a per person kind of set cost,” and that higher enrollment and acuity drove the supplemental request.

The FY2026 package contains ongoing appropriations or base adjustments tied to many of the same items: converting the hospital assessment supplement into an ongoing appropriation, adding federal‑mandated CAHPS surveys, funding an actuary contract amendment, continuing the EQR contract, advancing the MMIS (Medicaid management information system) procurement, and a large population‑forecast adjustment that accounts for FMAP changes, caseload, utilization and pricing assumptions.

Committee discussion repeatedly emphasized that parts of the package reflect non‑discretionary costs: federal requirements (EQR and additional CAHPS surveys), court‑ordered costs tied to the KW lawsuit (the adult DD resource allocation tool and associated attorney fees), and mechanics to access federal funds through the hospital assessment and upper‑payment‑limit methodology. Lawmakers also noted that forecast adjustments reflect utilization and price pressures and that forecast errors are resolved through future reversions or supplementals.

The committee also approved trailer language tied to the budget that directs the Department of Health and Welfare to explore and report on value‑based payment models for outpatient addiction treatment, to align contract periods with the state fiscal year, and to produce an annual emergency‑Medicaid report to JFAC. The package includes standard federal‑funding restriction language and conditions, limitations and restrictions text that the committee placed on the appropriation.

Votes at a glance - FY2025 Medicaid supplementals (one‑time): motion carried; total $415,226,800 (one‑time); funding split shown to committee: $511,400 general fund, $77,243,700 dedicated funds, $337,471,700 federal funds. Motion moved by Senator Wintrow; seconded by Representative Handy. Recorded tally (as read aloud): Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. The motion was reported forward with a new pass recommendation. - FY2026 Medicaid program maintenance and enhancements (ongoing adjustments and trailers): motion carried; total $674,192,600 (ongoing and adjustments). Motion moved by Representative Furness; seconded by Senator Burkey. Recorded tally (as read aloud): Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. The motion was reported forward with a new pass recommendation.

What the main items fund or change - Managed‑care external quality review (EQR): one‑time $1,350,000 to meet CMS EQR requirements for Idaho’s four managed‑care plans. Ongoing portion included for FY2026. - Idaho Behavioral Health Plan system configuration and capitation increases: one‑time configuration costs ($695,500 requested in the motion) and a capitation rate increase (requested $108,821,400 for FY2025) driven by higher participation and acuity; both items included in the FY2025 supplemental and FY2026 maintenance as appropriate. - Updated Medicaid forecast: FY2025 one‑time request of $113,849,300 to cover residual entitlement costs for the remainder of the fiscal year; FY2026 population/forecast adjustment of $376,124,900 (split shown to committee as $70,800,000 general fund and $305,200,000 federal funds) to reflect FMAP changes, caseload and utilization. - Hospital assessment fund: supplemental and an ongoing appropriation to enable hospitals to remit assessment funds that allow the state to draw additional federal funds under a revised upper‑payment‑limit calculation; FY2025 dedicated funds listed at $77,243,700 in the supplemental and an ongoing appropriation in FY2026 of $190,510,600 in the package as presented. - MMIS procurement: additional appropriation to allow the department to draw down state and federal shares for the ongoing multi‑year Medicaid information system replacement; committee discussion noted prior set‑aside of funds in a dedicated MMIS fund and staged payments tied to deliverables. - Actuary contract amendment: $1,100,000 appropriation requested (half federal, half general) to expand actuarial services used for capitation rate setting, forecasting and managed‑care actuarial analyses; committee members stressed reliance on the actuarial vendor to certify capitation rates as actuarially sound. - CAHPS survey contract: ongoing funding to add two federally required CAHPS surveys (additional $67,600 ongoing requested). - Adult DD resource allocation (KW lawsuit): $200,000 ongoing to support an assessment tool and to pay court‑ordered attorney fees linked to the KW court settlement.

Committee context and next steps Lawmakers repeatedly framed elements of the package as required by federal rules, court orders or previous legislation; members noted the budget increases largely reflect health‑care utilization and price growth rather than discretionary program expansions. Multiple members urged attention to implementation, work‑group follow up and the potential need for federal waivers (noted by committee members in relation to House Bill 345 trailers). The committee set reporting deadlines in trailer language (for example, JFAC reports due by Jan. 15, 2026, for specified items). The bills will move forward with pass recommendations as reported by the committee.

Ending The committee adopted the trailer language by unanimous consent and adjourned to work groups and follow‑up meetings to finalize remaining fiscal items and discuss other agencies’ budgets.