Idahoans may vote to expand Medicaid. But will skeptical lawmakers go along?

Idaho’s health insurance coverage gap

A legislative working group convened in 2016 for a day-long meeting on Idaho's "Medicaid gap" - people who do not qualify for Medicaid, but also do not make enough money for assistance through the state health insurance exchange.
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A legislative working group convened in 2016 for a day-long meeting on Idaho's "Medicaid gap" - people who do not qualify for Medicaid, but also do not make enough money for assistance through the state health insurance exchange.

Regardless of what voters decide on Medicaid expansion, the program’s fate still rests, in part, with the Idaho Legislature.

Medicaid expansion advocates turned to a voter initiative in part because the Idaho Legislature didn’t act to help the so-called Medicaid gap population. But if Proposition 2 passes in November, the same lawmakers who opposed expansion will still have a big say in how the state implements the program — or whether it funds it in the first place.

Much of the talk over legislative resistance has focused on the nuclear option: A repeal of the expansion.

There’s precedent for this. In 1994, Idaho voters ushered in term limits for lawmakers. The legislature overturned that law in 2002, then overrode a veto from Gov. Dirk Kempthorne.

Senate President Pro Tem Brent Hill, R-Rexburg, said that would be a long shot, especially if voters support Medicaid expansion by a large margin. Even if the Legislature were to overturn Medicaid expansion, both gubernatorial candidates have said they would honor the will of the voters.

“It’s going to be a waste of time to try to repeal it if there are those who want to do that,” Hill said.

Besides, there are other ways for lawmakers to resist implementation.

“If there is a showdown, it won’t be over repeal, I don’t think,” Hill said. “It will be over funding.”

If voters pass Proposition 2, the Legislature would need to fund the program, at a cost of an estimated average of $10 million a year. While declining to fund the program wouldn’t be a flat-out repeal, it would effectively prevent Medicaid expansion from going into effect.

But there are potential revenue sources, including from the hospitals themselves.

In Idaho, not-for-profit hospitals are exempt from paying property and sales taxes. Those exemptions were created so the hospitals could provide charity care for people who couldn’t afford their medical treatments.

“We gave (hospitals) a mechanism to go and do it yourself and that mechanism was tax breaks,” said House Assistant Majority Leader Brent Crane, R-Nampa. If hospitals are pushing for Medicaid expansion, Crane argued, the exemptions should be repealed.

Property taxes generally go to local taxing districts, bonds, and levies — not the state general fund, which would pay for part of Medicaid expansion.

The general fund is paid for largely through income and sales tax. That’s where the sales tax on hospital purchases would come in.

That sales tax exemption was valued at an estimated $33 million this year. However, a tax exemption’s value doesn’t necessarily reflect the actual savings the state would see from eliminating it, tax officials pointed out in a 2019 revenue report.

“New taxes on hospitals are simply an increased tax on Idaho patients,” said Brian Whitlock, president and CEO of the Idaho Hospital Association. “Why would someone suggest a tax increase when the funds to pay for Medicaid expansion already exist in the state’s budget? The latest data shows that Idaho hospitals provided more than $272 million in uncompensated care — either through charity care or bad debt. Medicaid expansion is not a windfall to hospitals; it will only reduce the amount of uncompensated care and the corresponding cost shift within the system.”

There’s also the possibility that the Legislature would decline to fund expansion entirely, Hill said. That, he said, would likely result in lawsuits.

House Health and Welfare Committee Chairman Fred Wood, R-Burley, said he expects to see proposed restrictions on who would qualify for Medicaid under the expanded program.

Wood, who supports expansion, said he would consider an “appropriately crafted” work requirement for able-bodied people, with considerations for what might happen under a recession.

The force of potential resistance might depend on the vote margins, and which parts of the state support expansion. Hill and Crane both said they expect lawmakers to look at how constituents in their legislative districts voted, especially if expansion passes narrowly.

Idaho’s next governor will set the tone, too. Democratic nominee Paulette Jordan is on the record as favoring expansion. Republican nominee Brad Little has said he will honor the will of the voters, but has refused to say what he personally favors.

There is also no indication of whether Little would whip votes for fully funding expansion, or where he stands on work requirements or other sideboards. Speaking Oct. 4 to the Idaho Statesman Editorial Board, one month before the election, he said a pending ACA lawsuit and federal adjustments to Medicaid rules left him reluctant to pick a side: “I said, I’ve got to wait till we’re closer before I decide.”

In the unlikely event of a tie vote in the Senate, the lieutenant governor, who presides over the chamber, would be the deciding vote. Democratic candidate Kristin Collum is in favor of expansion, while Republican candidate Janice McGeachin is adamantly opposed.

Wood said he hopes there won’t be much of a fight.

“I think once the voters speak, particularly if it’s a decisive vote, then the Legislature better start paying attention to what the people want,” Wood said.

Devon Downey and Nate Poppino contributed to this report.
Melissa Davlin is the host of Idaho Reports on Idaho Public Television. Reach her at 208-373-7220 or find her on Twitter at @davlinnews.
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