State Politics

Idahoans made Medicaid expansion the law. What happens next?

Volunteers gather petition signatures to add Medicaid expansion onto the November ballot

Volunteers Laurie Durocher and Paula Davis, right, gather signatures from registered voters in a Nampa neighborhood Saturday, April 7, 2018. They are looking for people in support of adding a Medicaid expansion initiative onto the November ballot.
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Volunteers Laurie Durocher and Paula Davis, right, gather signatures from registered voters in a Nampa neighborhood Saturday, April 7, 2018. They are looking for people in support of adding a Medicaid expansion initiative onto the November ballot.

More than 60 percent of Idaho voters on Tuesday directed the state to open up Medicaid to more adults — tens of thousands who are abled-bodied, childless and have low incomes.

Medicaid here has been very limited, covering children and pregnant women in low-income households, as well as people with disabilities and a few other small groups.

Advocates of Proposition 2 were jubilant as they watched results come in from around the state.

“Tonight, these hardworking Idahoans are not forgotten; they’re not ignored, they’re not unheard or unseen,” Reclaim Idaho co-founder Luke Mayville said in a press release. “Tonight, they are lawmakers, because tonight, Medicaid expansion is the law of the land.”

Now, Idaho has a string of choices to make. And there are many unknowns as Medicaid expansion takes effect. Will the state try to impose a work requirement? How will lawmakers grapple with paying for it? Will new Medicaid enrollments come in as a flood or a trickle?

The first step: The governor’s office and Legislature will decide how to fund the state’s share of new Medicaid spending. Then: If the Legislature doesn’t alter the law as passed on the ballot, the Idaho Department of Health and Welfare will submit Idaho’s expansion to federal regulators. Finally: Assuming the Legislature funds the expansion, money would start flowing next summer, and new Medicaid coverage would start taking effect Jan. 1, 2020.

“There are things we don’t know yet as we move forward to expand Medicaid,” said department spokeswoman Niki Forbing-Orr.

Here’s what we do know so far:

How much will it cost?

It’s hard to say for sure. The international actuarial firm Milliman has drawn up estimates for Idaho over the years. The latest, released by Health and Welfare last summer, pegged the net average cost at about $10 million a year.

Idaho now bears about 29 percent of Medicaid costs, with the federal government covering the rest. For the new expansion group, Idaho would bear 10 percent of the costs.

Even with the federal government paying most of the bill, expansion is projected to cost the state $530 million between 2020 and 2030, according to an estimate by actuarial firm Milliman.

But, Milliman projected that putting uninsured Idahoans on Medicaid would save other state and local programs a whole lot of money — leaving the actual new costs of expansion at $105 million during that time.

How will people sign up?

The state won’t send out notices or go door to door enrolling people who now qualify for Medicaid. But there are a few entry points that already exist:

  • When someone seeks public assistance through Health and Welfare, the agency already looks at their eligibility for a whole suite of aid programs — food stamps, child care, financial aid and Medicaid.

  • Certain medical providers, like hospitals, can enroll patients in Medicaid under a “presumptive eligibility” rule. The coverage is temporary but opens the door for people to get Medicaid on a regular basis.
  • When someone tries to buy a health insurance plan through the state’s exchange, Your Health Idaho, they enter information about themselves, their family and their income. The website lets them know if they might qualify for Medicaid.

Will the state have to spend more just to operate Medicaid?

Yes. The federal government will bear most of the administration costs, but adding more people and health care claims to the system will cost the state more money as well.

The Milliman report estimated the state will have about $1 million in administrative costs in the first year, then about $900,000 per year after that. The federal government will cover about $2.1 million the first year, then $1.6 million per year after that.

Will lawmakers fund it? How will they get the money?

Those are the two biggest questions.

The “nuclear option” — repealing the law — is unlikely, according to Melissa Davlin of Idaho Reports. But it’s possible that expansion could get caught up in a budgetary tangle.

“If there is a showdown, it won’t be over repeal, I don’t think,” Idaho Senate President Pro Tem Brent Hill told Davlin in October. “It will be over funding.”

Other states have funded their expansions with taxes on sales, alcohol, hospitals and health insurance companies.

Lawmakers have floated the idea of turning to nonprofit hospitals — currently exempt from property and sales taxes — for a new tax revenue source, Davlin reported. Hospitals don’t like that idea, with industry members arguing that additional taxes would get passed on to patients.

Utah voters Tuesday approved a 0.15 percent sales tax increase to expand Medicaid in the state. On the same day, Montana voters rejected a tobacco tax increase to continue funding its expansion.

Regardless of how it’s paid for, the Kaiser Family Foundation reports that most states have fared well under expansion.

“Rather than being a cash drain, many health policy researchers and economists note, expansion has generally boosted state economies, with higher employment, reduced state spending on health care services for the uninsured, and consumer spending elsewhere that would have gone to health care,” the health care news outlet reported last month.

Will the state hire a health insurance company to manage benefits?

It could.

Health policy researchers told the Statesman this fall that people in the expansion group are pretty healthy and able-bodied. And a healthy population is attractive to health insurers.

Idaho has tested the waters of “managed care” — hiring an insurer to run a piece of its Medicaid program. The state currently pays Optum Idaho to manage outpatient mental health care for people on Medicaid. Optum is expected to handle claims, contracts with providers, member and provider calls and other duties.

Will the law face any other roadblocks?

The morning after Idahoans voted to pass expansion, the Idaho Freedom Foundation said it’s going to keep fighting the plan.

The conservative political organization said the ballot measure was “poorly worded and likely unconstitutional.”

Wayne Hoffman, president of the foundation, earlier went into detail on that critique. He argued last month in an article on IFF’s website that the wording of Proposition 2 went against the Idaho Constitution by ceding some control to the federal government and Idaho Department of Health and Welfare.

Asked Wednesday if IFF plans to challenge the law in court, a spokesman for the group said only, “Stay tuned.”