House Bill 535, sponsored by Rep. Janet Trujillo, R-Idaho Falls, passed the committee on a 10-1 vote. It now will be heard by the full House.
Counties should no longer be on the hook for medical costs of residents who qualify for health insurance under the Affordable Care Act, and, by extension, Idaho's health insurance exchange, Trujillo said.
Idaho's indigent statutes make counties responsible for people who otherwise cannot afford emergency or chronic medical care. The counties cover the first $11,000 per person in costs with property taxpayers picking up the rest.
The Catastrophic Health Care Cost Program's own declaration of policy states residents should be encouraged to buy health insurance and that the fund is the "payer of last resort," Trujillo said.
Her proposal would save the state's general fund about $12 million, while nearly $6 million could be saved by the counties. If adopted, the measure would become law in 2016.
Rep. John Rusche, D-Lewiston, who serves on the state insurance exchange's board as well as the administrative board that oversees the catastrophic program, voted against the measure.
Under that legislation, Rusche said, hospitals would be left on the hook to cover the treatment costs of patients who paid a penalty to opt out of the Affordable Care Act.
"They would still be legally compliant with the Affordable Care Act even without insurance," he said.
Jim Baugh, executive director for Disability Rights Idaho, also testified against the measure. The legislation would become a moot point as more people sign up for the exchange, he said, but would cause problems for those seeking financial medical assistance in the interim.
"You have to understand that saving the money to the general fund is based on preventing the claims (through the CAT Fund)," he said. "If we can sign 90 percent of these people up through the Affordable Care Act with subsidized insurance plans, we are going to save that money with or without this legislation."
Rep. Fred Wood, R-Burley, said the bill takes the much-needed first steps to address the state's failing indigent health care system.
"This starts us down the road in which I think we'll wind up," Wood said.