The Medicaid shortfall that Idaho could face next year could require cutting as much as $500 million out of the state’s Medicaid program, Idaho Health & Welfare Director Dick Armstrong told the Legislature’s health care task force today, including $130 million in state funds. There are already about $75 million in cuts in Medicaid in the works to save money, from cutting rates paid to hospitals and nursing homes to trimming mental health benefits; if the larger shortfall materialized, those cuts would be just the tip of the iceberg. “Some of this is rather bad health policy, but we don’t have a choice at this point - we have to have a balanced budget,” Armstrong told lawmakers. “There will be lawsuits, there will be challenges. … As we look ahead, we are clearly very concerned about this all. This is a huge change that has to be made, and it will not be easy.”
Those figures are based on a projection that the federal match rate for Medicaid - now boosted by the economic stimulus legislation to 79.18 percent, or nearly 80 cents in federal money for every 20 cents the state spends - will drop to 68.85 percent in 2011. That’d force Idaho to come up with millions more to fund the program, and anything for which the state can’t fund the match would have to be eliminated. It’s possible that the federal match rate might not drop after all, but Armstrong said Idaho won’t know until long after it’s had to set its state budget. “We have to put a budget forward based on what we know now,” he said. Sen. Nicole LeFavour, D-Boise, said that approach means “trying to make the most-vulnerable people, basically, pay to balance the budget.” Medicaid provides health coverage for Idaho’s poorest and disabled residents.