State Politics

A closer look at Otter’s health coverage plan

Idaho Governor Butch Otter’s State of the State address highlights

As the Idaho Legislature convened for its 2016 session, Gov. Butch Otter outlined some of his priorities, including a $116 million boost for education, in his State of the State speech. The Idaho Statesman’s Bill Dentzer explains the other highlig
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As the Idaho Legislature convened for its 2016 session, Gov. Butch Otter outlined some of his priorities, including a $116 million boost for education, in his State of the State speech. The Idaho Statesman’s Bill Dentzer explains the other highlig

Backers are touting the medical care plan as an Idaho-grown solution and an alternative to Medicaid expansion, which is an option to states under the Affordable Care Act. Although other Republican-led states have expanded Medicaid, in some cases with waivers that make it more politically palatable, Idaho’s Legislature will not permit a bill even to be introduced.

So the Primary Care Access Program, as Gov. Butch Otter’s initiative is called, essentially connects individuals with primary care facilities and pays those providers $32 per month per person for doctor visits. Multiply $32 by 12 months by 78,000 people and you get just under $30 million.

The plan would let people establish relationships with a doctor and would cover preventive care. It would not cover acute or chronic care, hospitalization or prescriptions.

House Speaker Scott Bedke said lawmakers “are going to give it a look” but he could not “make any commitment on where it will go or how it will fare.”

“I think that this addresses some of the concerns that we’ve had up to this point,” he said. “This is Idaho money with Idaho rules. I think that most legislators agree that the way we deliver health care to that segment of our society is inefficient and expensive. And so if we can do anything to better that then I think that we’re interested.”

Have questions about how this will work? Send Bill Dentzer an email or a tweet.

FUNDED BY TOBACCO, CIGARETTE TAXES

The proposal would be funded by a transfer of $32.4 million from tobacco and cigarette taxes. Here’s how that would work:

The state tobacco tax is a 35 percent levy on the wholesale price of tobacco products other than cigarettes. That’s estimated to bring in about $11.2 million in the fiscal year that starts July 1. The funds are currently unallocated, so all of that would be diverted to pay for the health plan.

The state cigarette tax is 57 cents per pack. It is forecast to bring in about $33.2 million in the next fiscal year. As proposed, $21.2 million of that amount would be diverted to the health coverage plan. To do this, the state would shift some funds and close out a few others that are scheduled to expire — or “sunset,” in government-speak — in a few years.

The health program itself, as proposed, would sunset after five years. With legislative opposition blocking Medicaid expansion, the idea is that at least the state program would do something to provide Idaho’s poorest residents with basic preventive care. Outside of prevention, bigger health care expenses — the kind that break the bank — will continue to be offset by the state Catastrophic Health Fund and county indigent funds.

At least it’s something, right? Well, it depends. Democrats pounced on the plan for simply adding to the state burden on taxpayers. Democrats and others who support accepting the federal Medicaid expansion note that doing so would return to Idaho health care dollars that state residents already contribute through their federal taxes. In fact, it’s those dollars and then some, because richer states pay more into the system.

DECLINING REVENUES, LONG-TERM VIABILITY

The Idaho plan, as structured currently, is not really a long-term solution. It can’t be, for the simple fact that revenues from cigarette taxes are expected to decline by up to 8 percent a year, or $1.5 million, over the next three years as smoking continues to decline. Tobacco taxes during the same period will rise slightly as wholesale prices rise, but only by about $230,000 per year. And no one would lose money betting that health care costs will also increase in the same period.

Sen. Dan Schmidt, D-Moscow, raised that issue Tuesday when legislative budget writers got an overview from the Division of Financial Management.

If the Legislature approves Otter’s plan — and that’s not certain — the program clearly will need tweaking in future years to address that potential imbalance. Beyond affordability, opposition is also likely from lawmakers who dislike “entitlements” of any kind. So don’t schedule that doctor visit just yet.

Bill Dentzer: 208-377-6438, @IDSbilld

Multiyear tobacco taxes forecast

Tobacco/cigarette tax revenues

Tobacco tax

Cigarette tax

Total

FY17

$11,218,400

$21,191,300

$32,409,700

FY18

$11,460,500

$19,774,400

$31,234,900

FY19

$11,678,700

$18,310,500

$29,989,200

FY20

$11,907,900

$16,807,800

$28,715,700

Source: Division of Financial Management

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