Part II of a Statesman series on Uninsured Idahoans presents the fiscal argument for expanding Medicaid to cover 78,000 of our neighbors. For previous segments of the series or to view a list of resources and links, go here.
In Idaho, we generally value our ability to take the fullest advantage of available federal dollars, regardless of our personal political tilt. Federal dollars are used to feed our economy, supplement state and local budgets, and sometimes reduce the need for state and local taxes.
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Our highway system receives far more in federal highway dollars than we pay in federal fuel taxes. Federal installations such as the Idaho National Laboratory, Gowen Field and Mountain Home Air Force Base are major parts of our economy. Farmers depend upon federal crop subsidies to supplement their income. And whether or not you like federal ownership of much of Idaho’s land, nobody complains about the massive annual influx of federal dollars used to provide fire protection on those lands.
Given all of this, it is puzzling why many members of the Idaho Legislature are reluctant to have the state use federal dollars to expand our Medicaid program, even though such expansion would lead to increased economic activity and lower property taxes.
Idaho has an estimated 78,000 adults (referred to as the gap population) who have no medical insurance and earn too much to currently qualify for Medicaid. Ada and Canyon counties have an estimated 20,000 gap participants. In Canyon County they total 9.5 percent of the population, according to U.S. Census Bureau figures. To help provide medical services for these people, the burden falls on state and county governments that will spend, statewide, a projected $56 million this year on indigent medical services, with slightly less than half of that amount coming from property taxes.
The Idaho Department of Health and Welfare has run figures to estimate the impact on state and local budgets of expanding Medicaid. Had the expansion been enacted during the current year, they estimated, in return for $577 million in federal dollars, a net decrease of $7.7 million in state expenditures and local property tax support decreasing by $23.4 million. And an additional 78,000 Idahoans would have Medicaid coverage.
If the state were to accept the increased federal dollars to expand the Medicaid program, it would not only reduce our county property taxes, but also would provide a significant stimulus to Idaho’s economy. The largest employer in Idaho is St. Luke’s Health System, with over 12,000 employees. Saint Alphonsus is the seventh-largest Idaho employer, with over 4,000 employees.
University of Idaho economist Steven Peterson estimates that if the expansion had been approved for the current year, it would have created 11,787 jobs with a total compensation of $438,985,884. This, in addition to other increases from sales transactions and increases in the gross state product, would have generated an additional $16.2 million in sales tax revenues, $8.7 million in property tax revenues, and $12.3 million in income taxes.
There are additional positive financial impacts that are difficult to project. About 41,000 Idahoans have serious and persistent mental illness. According to the Department of Health and Welfare, “most Idahoans with serious and persistent mental illness have no coverage for mental health treatment, or for expensive prescription drugs needed to control their symptoms.” Medicaid expansion would make mental health services available to thousands of low-income Idahoans in need of mental health care.
So given all of this, why has it taken four years of debate to see this issue unresolved? There could probably be a lot of finger pointing, some deserved and some not. But the truth is that this is a major issue and it is not uncommon for the state to take a long time to decide major issues. Three that come to mind are public kindergartens, GARVEE funding for highways and the establishment of the state insurance exchange.
But time is running out for the state on this issue. The Legislature has an interim committee that is once again working on this issue. House Speaker Scott Bedke has indicated he hopes that the committee will have recommendations for presentation to the full Legislature later this year. We hope, for the sake of 78,000 uninsured Idahoans, as well as all of Idaho’s taxpayers, the panel will meet that deadline and the Legislature will act on its recommendations.
If the Legislature once again fails to act on this issue, then the governor should consider taking unilateral action to make the expansion happen.
Though the majority of our editorials are unsigned opinions representing the consensus of the Editorial Board, this piece was researched and written by Martin L. Peterson, one of the board’s community members. Peterson, who is retired and lives in Boise, has had extensive experience in state government, including serving as budget director for two Idaho governors.