JFAC reviews Medicaid budget increases, hospital assessment and behavioral health payment problems

The Joint Finance-Appropriations Committee on Feb. 26 heard detailed testimony on the Division of Medicaid budget showing multi-year growth driven by caseload, provider rate increases, changes in hospital assessment methodology and the cost of managed-care transitions.

Legislative budget analyst Alex Williamson told the committee the division had $4.56 billion appropriated for fiscal 2024 and expended about $4.27 billion. “This will probably feel like information overload,” Williamson said as she outlined five supplementals and several 2026 enhancements included in the governor’s recommendation.

Why it matters: Medicaid is an entitlement program that covers low-income Idahoans, the elderly, people with disabilities and adults covered by expansion. Because federal rules set eligibility and many benefits, changes in utilization, provider rates or federal matching formulas quickly shift costs the state must fund.

Key budget drivers and requests - Expenditures and composition: Williamson told the committee trustee and benefit payments made up more than 98% of the division’s $4.27 billion expenditures in FY2024; personnel and operating for Medicaid administration totaled about $67 million. She contrasted the basic adult/child population (about 51% of participants but roughly 19% of expenditures) with coordinated/enhanced plans (about 20% of participants but roughly 57% of costs).

- Supplementals for FY2025: Williamson reviewed five supplementals the governor recommended, including $1.35 million for an external quality review (EQR) required by CMS for managed care plans; a supplemental to onboard a new vendor for the Idaho Behavioral Health Plan (IBHP); a capitation rate increase split across plans; and a…