How will Idaho pay for health care reform?

WASHINGTON — As Congress continues its work to overhaul the nation’s health care system, states such as Idaho know one thing: Key decisions on who will be covered and how it will be paid for still will have to be made in Boise and other state capitals.

And that’s what worries Idaho Gov. Butch Otter, who, along with other Republican governors, has called it “unacceptable” for the federal government to dictate state spending on health care. Otter did not meet with the other GOP governors last week in Texas, but

released a statement in support of the position staked out by the Republican Governors Association. “They’re threatening to impose incredible costs on states like Idaho, and more importantly on the people we serve,” Otter said. “These are costs that are ongoing, and will force us to make difficult and painful choices about our own priorities here at home.”

So far, Idaho hasn’t done an in-depth analysis of what’s in the House and Senate versions of the legislation to determine the impact on Idaho. The state doesn’t have the resources to do so until some sort of compromise bill emerges, said Tom Shanahan, a spokesman for the Idaho Department of Health and Welfare.

“We’re still trying to figure out what’s in it,” said Jon Hanian, a spokesman for Gov. Butch Otter. “There are a lot of questions, at least from our perspective, as to what’s being voted on and how it’s going to impact us.”

But if health care reform goes through at the federal level, Shanahan said, Idaho officials expect to see a bigger pool of people eligible for state-subsidized health care.

That likely means expanding Medicaid, a program paid for mostly by the federal government, but administered by states and paid for in part with state tax revenue, too.

In Idaho, Medicaid serves 190,000 people — including 140,000 poor children.

Right now, the state isn’t sure how much of the expansion will be covered by federal tax dollars. And no matter how the legislation is written, the population is likely to expand to more adults.

The state made a number of cuts last year, Shanahan said, including reducing the hours for mental health and developmental disability services. The state also already reduced reimbursements to hospitals and nursing homes, and froze some doctor pay.

“Right now, if you asked us to make more reductions, they’d all be very difficult from here on out,” Shanahan said. “There are no reductions that could be made to improve public policy.”

But further cuts in some state services are inevitable, Otter said, when he released his statement in support of the RGA position.

The state is projecting a $151 million shortfall in anticipated revenue for next year and “more spending reductions are anticipated,” Otter said.

The Idaho Hospital Association has its share of concerns, too, said Steven Millard, its president. Already, hospitals nationally have agreed to a number of cuts to Medicare in exchange for seeing more people covered over the next 10 years. They’re especially concerned about Idaho’s fragile budget situation, Millard said.

“We’re worried about the state being able to put up the match to get the additional folks covered,” Millard said. “The money isn’t there.”

Regardless, doing nothing is not an option in a state where 18.5 percent of the population is without health insurance, Millard said.

“The status quo is unsustainable; we absolutely understand that,” he said. “A lot of our members aren’t waiting for the feds to fix things … but it’d be helpful if we get some help on the federal side.”

The House on Nov. 7 narrowly passed its version of a health care bill. Both Rep. Mike Simpson, a Republican, and Rep. Walt Minnick, a Democrat, voted against the bill.

Now, the Senate is set to begin debating its version of a bill, introduced by Senate Majority Leader Harry Reid, D-Nevada. Both of Idaho’s Republican senators, Mike Crapo and Jim Risch, voted Saturday night against letting the bill go to the floor of the Senate for further debate.

The Senate version includes a “public option” that states can opt out of, and would prohibit insurers from denying coverage for pre-existing conditions. It also would tax high-end insurance plans and elective cosmetic surgery.

Already, lawmakers in some states are wary of what they see coming out of Washington. The National Conference of State Legislatures found that in at least 11 states, lawmakers have filed legislation that would limit, alter or flat-out oppose some aspects of the federal health care overhaul actions, including mandates that would require people to purchase insurance. In Arizona, a 2010 ballot initiative will ask voters to affirm whether state law should prohibit forcing any person or employer to participate in a health care system.

Still, there’s room for optimism for many states, said Anne Gauthier, a senior fellow, at the National Academy for State Health Policy. The Washington, D.C., nonprofit, which works with state health officials, this month published a guide to health care reform for state policymakers.

“There are going to be a number of challenges, but there also are going to be some opportunities for new funding, for chances to do some innovations in medical delivery systems,” Gauthier said. “There are actually a number of kind of cool things that are going to be useful, that are going to help states ... improve efficiency.”

Idaho is unlikely to seek to opt-out of the national overhaul if that’s an option available when the final legislation passes, Hanian said. But Otter believes the proposals in play right now “negatively impact the economy of this country,” Hanian said, by imposing higher costs on businesses that cannot afford to provide the mandated coverage.

“We’re waiting to see what they come up with,” Hanian said. “But so far the concern is it’s going to be far too expensive.”

Erika Bolstad: (202) 383-6104