Discussing the first option before the Medicaid expansion working group today - no expansion of Medicaid, and no change to the current medical indigency program - state Health & Welfare Director Dick Armstrong noted, "Clearly no expansion ... does not mean no work. There's a significant amount of effort that has to take place." The current indigency program is facing fast-rising costs, he noted, with a significant offsetter of costs, the pre-existing conditions insurance program, or PCIP, expiring in 2014. Current estimates show the indigency program, now at roughly $60 million a year between state and county taxpayer funds, would rise to $92.2 million by 2020.
Armstrong said those estimates are conservative, particularly because Idaho's household income has fallen for the last three years, even as inflation has continued. "So households today simply are not able to support themselves as they have in the past."
Sen. Dan Schmidt, D-Moscow, a physician, asked if those figures include administrative costs, and the answer was no. "These are the direct benefits paid, and not any of the administrative costs," said Dan Chadwick, head of the Idaho Association of Counties. Armstrong said, "That's a great question. Right now, there are approximately 100 county employees engaged in this process of indigency, and that's a cost we have not thought about until just recently, and needs to be folded into some of these other scenarios." Administrative costs include everything from processing applications to placing liens on applicants' property and collecting on those liens, when possible, to offset benefits paid out. Hospitals, too, are facing significant administrative costs for participating in the program, said Steve Millard of the Idaho Hospital Association.
Chadwick said, "Fifty-three hearings are being held today on indigent claims in our neighboring county. That includes hospital staff, county staff, attorneys, county commissioners, sitting there listening to all these claims. That's a whole lot of time and effort putting in for just one day. It's a big deal. It's a large cost."
Armstrong noted, "Sixty percent of the cases that come before the counties are not accepted." Millard said, "The costs don't go away, just because the state doesn't pay for them, or the indigent program doesn't pay for them." Unreimbursed costs drive up premiums and costs for everyone, he said.