JFAC approves Medicaid supplementals and forwards $674.2 million FY2026 package

The Joint Finance‑Appropriations Committee voted to approve one‑time fiscal‑year 2025 supplementals for the Department of Health and Welfare's Division of Medicaid and advanced a larger FY2026 program‑maintenance package on unanimous procedural action followed by roll‑call votes. The committee moved the FY2025 supplementals forward as a bill and recommended passage on a roll call that recorded 7 ayes and 3 nays in the Senate delegation and 6 ayes, 3 nays and 1 absent/excused in the House delegation; the FY2026 package passed by the same recorded margin.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 supplemental request consolidates a set of one‑time payments and system costs and that the package on the table includes an external quality review for managed care, implementation costs tied to the Idaho Behavioral Health Plan, forecast revisions and an increase to the hospital assessment fund. "This is a federal requirement," Williamson said of the external quality review contract, describing the items as the division's effort to "pay our bills" for implementation and forecast differences.

Why it matters: the measures address near‑term payment obligations and position the state to draw federal matching dollars. Committee members repeatedly cited caseload, utilization and rising health‑care costs as the driver of the larger increases and flagged that some changes require federal waivers or are court‑ordered obligations.

What the committee approved

- FY2025 supplementals: The committee approved a package the committee recorded on the floor as totaling $415,226,800 one time (combined general, dedicated and federal funds). The package as presented included line items described in committee materials and on the screen: a managed‑care external quality review contract, Idaho Behavioral Health Plan system and capitation adjustments tied to higher enrollment and acuity, an updated Medicaid forecast, and a dedicated hospital assessment fund deposit to enable the state and hospitals to access additional federal funds under a revised upper payment limit calculation. Senator Wintrow moved the motion; Representative Handy seconded it. The committee recorded the motion as going forward "as a bill with a new pass recommendation."

- FY2026 program maintenance package: The committee approved the FY2026 program maintenance motion that includes ongoing versions of several of the FY2025 items (for example, ongoing funding for the external quality review and the hospital assessment fund) plus separate items such as additional actuarial contract funding, expanded MMIS (Medicaid Management Information System) procurement appropriations and a population‑forecast adjustment. Representative Furness moved the FY2026 package; Senator Burkey seconded. The motion, as presented, requested an additional $70,141,900 from the general fund, $88,963,700 from dedicated funds and $515,087,000 from federal funds for a total of $674,192,600.

Key drivers and committee discussion

- Updated forecast and utilization: Committee staff said the Medicaid forecast model has been updated with additional months of actual expenditure data, and that higher-than‑expected enrollment and service use drove a request for additional entitlement funding. Williamson described the forecast change as a better estimate of "what the final bill is going to be for fiscal year 2025" and noted that if the state overestimates the appropriation it will revert; if it underestimates, the committee would need another supplemental.

- Idaho Behavioral Health Plan: Williamson and committee members discussed system configuration and capitation rate increases for the Idaho Behavioral Health Plan, explaining that more individuals than anticipated accessed the benefit and with higher acuity, requiring additional funds to maintain actuarial soundness.

- Hospital assessment fund: Staff explained the requested dedicated deposit enables hospitals to transmit assessments to a state account so the state can draw down federal dollars under an updated upper payment limit methodology. Williamson said the change allows hospitals to access additional federal funds that are then remitted back to hospitals to approximate Medicare rates.

- Actuarial services and MMIS: Committee members emphasized reliance on external actuaries for rate setting and forecasting. Senator Cook said actuaries are essential: "The actuary, we can't live without them; we'll be running totally blind without them." The committee also discussed a multi‑year MMIS replacement project; members said money for the state share has been set aside in a dedicated fund and the appropriation frees up cash as milestones are completed.

- Legal and policy constraints: The committee incorporated trailers for House Bill 345 into the FY2026 package and referenced a court settlement tied to adult developmental‑disability resource allocation (the transcript refers to a "KW" lawsuit). Williamson told the committee the line for the adult DD resource allocation model is related to the KW lawsuit settlement and will fund an assessment tool and court‑ordered attorney fees.

Votes at a glance

1) FY2025 Medicaid supplementals (one‑time additions): recorded total (as presented) $415,226,800. Motion by Senator Wintrow; second by Representative Handy. Recorded vote: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Outcome: approved and forwarded as a bill with a new pass recommendation.

2) FY2026 Medicaid program maintenance package: requested additional $70,141,900 (general), $88,963,700 (dedicated), $515,087,000 (federal) for a total of $674,192,600. Motion by Representative Furness; second by Senator Burkey. Recorded vote: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. Outcome: approved and forwarded as a bill with a new pass recommendation.

What remains: committee language and reporting requirements

The committee adopted budget language directing the Division of Medicaid to explore a value‑based payment model for outpatient addiction treatment and report to JFAC by Jan. 15, 2026; to align Medicaid contract periods with the state fiscal year and report progress by Jan. 15, 2026; and to add an annual emergency‑Medicaid report on clients served and expenditures due to JFAC after each fiscal year (no later than Sept. 15). Committee members cautioned that these additional reporting requirements were not matched with new staff capacity and could increase workload on agency staff.

Context and next steps

Committee members repeatedly characterized the increases as driven by health‑care utilization and cost growth rather than new services. Several speakers noted that some components (for example, the hospital assessment and certain federal requirements) are mechanisms to access federal funds rather than new state‑funded programs. The committee adjourned and scheduled work groups to continue consideration of other agency budgets.

Ending

The motions will be carried forward as bills with pass recommendations from JFAC; further committee and floor action will determine final appropriation and any required federal waivers or contractual changes.