Idaho Medicaid budget rises; agency seeks $376M in enhancements, $190M hospital assessment supplemental

Boise — The Division of Medicaid told Idaho lawmakers on Feb. 26 that state Medicaid costs have continued to rise and the Department of Health and Welfare (DHW) is seeking multiple supplemental and ongoing budget increases to cover recent program changes, federal requirements and implementation costs.

Alex Williamson, budget and policy analyst with Legislative Services, told the Joint Finance‑Appropriations Committee that Medicaid remains large and complex and that recent cost drivers include implementation of Medicaid expansion, provider rate increases approved by the Legislature, changes to how the state calculates upper payment limits for hospitals and nursing facilities, and growth in utilization following the COVID‑19 public health emergency. “This will probably feel like information overload,” Williamson told the committee as she opened the Division of Medicaid briefing.

The governors’ recommended requests presented to JFAC include several supplementals for fiscal 2025 and a package of 2026 enhancements. Among the line items described:

- A supplemental for an external quality review (EQR) for managed care plans: $1,300,000 one‑time (page 2‑47 of the budget book). Williamson said that Idaho currently has four plans requiring EQRs, including behavioral health and two Medicare‑Medicaid dual plans.

- One‑time system configuration and go‑live costs tied to onboarding the new Idaho Behavioral Health Plan (IBHP) vendor: Williamson gave a one‑time figure of $695,500 to complete system configuration and testing and also referenced an associated increase in estimated federal benefit payments of about $113,800,000 (one‑time) tied to forecast changes.

- A capitation rate increase for managed care plans that Williamson said…