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Legislative analysts outline $6 billion Health and Welfare budget, highlight Medicaid drivers
Summary
Legislative Services presented the Department of Health and Welfare’s budget picture, citing Medicaid population and hospital assessment changes as primary drivers of a fiscal-year-2026 recommended budget near $6 billion and outlining an organizational rework at the department.
Legislative Services analysts presented the Department of Health and Welfare’s budget review to the Senate Health and Welfare Committee, emphasizing that recent and projected spending increases are driven primarily by Medicaid changes and hospital assessment-related federal dollars.
Alex Williamson, budget and policy analyst with the Legislative Services Office, told the committee the department’s recent spike in appropriations — an increase of roughly $670 million from fiscal 2022 to 2023 — was driven largely by Medicaid adjustments, population forecast updates and changes to the hospital upper payment limit. “About two thirds of that came from changes to Medicaid,” Williamson said, noting the upper payment limit and hospital assessment changes increased federal dollars flowing through the state’s accounting records.
Williamson walked the committee through the General, Dedicated and Federal (Gen/Ded/Fed) report and said the administration’s fiscal 2026 governor’s recommendation would put the department’s total appropriation at roughly $6 billion, with about $1.2 billion from the state general fund if all proposed supplementals and enhancements are approved. She also called out several large items that factor into the request: a hospital assessment adjustment to capture increased federal reimbursement, a multi-year Medicaid MMIS replacement procurement (with a substantial dedicated appropriation to capture the state match) and a population-forecast adjustment that reflects utilization and FMAP shifts.
On the MMIS (Medicaid Management Information System) procurement, Williamson said the project is structured with a favorable federal match for Medicaid IT (commonly a 90/10 split) and noted the state set aside the expected 10 percent match in a dedicated fund in prior years. She said the midyear MMIS request for the current fiscal year represents part of a multi-year drawdown that includes both state dedicated funds and the related federal drawdown.
Williamson also summarized organizational changes at the Department of Health and Welfare, saying the governor’s director had restructured divisions to emphasize child, youth and family services (retitling child welfare as Youth Safety and Permanency), consolidate Medicaid program integrity and move the Idaho Childcare Program under early learning and development responsibilities. She pointed the committee to LSO’s online tools for detailed budget dashboards and to the Gen/Ded/Fed report for line-by-line figures.
Committee members asked clarifying questions about the hospital assessment, the FMAP effect on state versus federal shares, and the childcare initiative request. Williamson said the hospital assessment works by hospitals providing the state match into a dedicated account, which enables the state to draw federal funds and remit payments back to providers; she said changes to the FMAP can shift the federal share and thus change the state’s general-fund obligation.
No committee action on the budget occurred during the hearing; the presentation was informational and the committee recessed to other business after questions.
