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Legislative analysts present $6 billion Health and Welfare budget; Medicaid growth drives increases
Summary
Legislative Services Office analysts told the Senate Health and Welfare Committee the Department of Health and Welfare’s 2026 program‑level request totals roughly $6 billion, driven primarily by Medicaid population and program adjustments, a hospital assessment/upper payment limit change and a multiyear MMIS procurement.
BOISE — Alex Williamson, a budget and policy analyst with the Legislative Services Office, briefed the Senate Health and Welfare Committee on the Department of Health and Welfare’s budget outlook and highlighted Medicaid as the primary driver of recent spending growth.
Williamson said the department’s most recently closed fiscal year saw spending of roughly $4.9 billion on appropriated authority and that approximately 91% of the agency’s expenditures go to trustee and benefit payments such as Medicaid reimbursements and assistance payments. She told the committee that if the governor’s recommendations and pending supplemental requests are approved, the department’s fiscal‑year 2026 appropriation would total about $6 billion in combined funds with approximately $1.2 billion from the state general fund.
Key budget drivers identified in the presentation included: changes to the Medicaid population forecast and federal match (FMAP), adjustments tied to an expanded hospital assessment and upper payment limit methodology that increased federal dollars to hospitals, and a multiyear Medicaid Management Information System (MMIS) procurement. Williamson described the MMIS procurement as a multi‑year IT modernization project that uses a dedicated state fund to capture the state’s anticipated 10% match to draw down 90% federal funds for the project.
Williamson also summarized several midyear supplemental requests that would affect the current fiscal year if approved, including an adjustment to make the hospital assessment dollars ongoing after prior session changes that were not made permanent, and a suite of staffing and prevention‑focused requests tied to child welfare and foster services. She said the governor’s budget included a $15 million initiative for the Idaho Childcare Program.
Senators asked clarifying questions about the hospital assessment and upper payment limit, and Williamson explained that hospitals deposit a state match into a dedicated account to meet federal match requirements; the state must appropriate both the dedicated state dollars and the federal receipts to remit funds back to hospitals under the program. She also explained that FMAP calculations can shift the share of costs between federal and state sources depending on Idaho’s relative economic measures.
The presentation included an organizational chart showing a departmental reorganization: Family and Community Services would be retitled and split into new divisions including Child, Youth and Family Services; Child Welfare would be retitled Youth Safety and Permanency; and several programs (including the Idaho Childcare Program) would be elevated or moved among divisions. Williamson said the department has requested several position‑level additions, including staff for prevention specialists and additional foster‑care related personnel.
Williamson directed senators to Legislative Services Office budget dashboards and the legislative budget book for detailed line‑by‑line figures and told members the dashboards include 10 years of appropriations and expenditures. The committee thanked her for the briefing; there was no committee action on the agency budget during the hearing.
