The Joint Finance-Appropriations Committee is starting into some segments of the Health & Welfare budget this morning, the complex agency that is the state’s largest department. As part of that, the Indirect Support Services division was up for budget-setting; it includes the Medicaid Readiness project under which Idaho must revise computer systems and eligibility programs to comply with federal laws. Within that was $200,000 for remaining IT changes, with all but $20,000 of that in federal funds; and $1.7 million for ongoing operation of those computer system changes, including 24/7 operation; of that, $225,900 is a state match, and the remaining $1.46 million is federal funds.

Sen. Steven Thayn, R-Emmett, led a move to cut out the $225,900 in state funds. Along with Sens. Sheryl Nuxoll, R-Cottonwood, and Steve Vick, R-Dalton Gardens, Thayn proposed a budget motion slicing out that state money, saying, “This is something that’s required by the federal government. I think this is $225,000 that we could be using in other areas. Since it’s their policy, I think we should be using their money.”

However, by failing to provide the state match, Idaho could lose the entire $1.46 million in federal funds, putting it into a position of non-compliance with the federal law. “I respect what your feelings are, I understand that,” said JFAC Co-Chair Maxine Bell, R-Jerome. But she raised concerns about “leaving a state agency upside down going home, and not knowing what the penalties, the ramifications are when we leave town.” Those potentially could include a loss of even more federal matching funds for Idaho’s existing Medicaid program. “We don’t know what could happen to all the other parts,” Bell said, questioning whether under Thayn’s proposal, “they have the tools they need to obey that law that’s in place.”

Thayn said his intent was that the Department of Health & Welfare sit down and negotiate with the federal government to see if it could get out of providing the state match. “The intent is to send a message to our federal partners,” he said. “It’s the federal government’s policy, and … Idaho funds should be reserved for Idaho policies.” However, there’s been no indication from the federal government that the required state match is negotiable.

Part of the reason the eligibility system is being required to go to 24/7 operation is because it will be accessed online in the future, including through insurance exchanges. The system currently is up and running only during business hours.

Vick said, “I wonder personally when is the time to say the irresponsible spending that they do in Washington, D.C., how much of that can they force on us.” He said, “It shows we’re not really that much of an independent legislative body, we’re just an administrative branch of the federal government. … It’s part of a deeper frustration.”

The joint committee voted down the Thayn/Nuxoll/Vick proposal on a 5-15 vote, with just Sens. Dean Mortimer, R-Idaho Falls, and Cliff Bayer, R-Boise, joining the three sponsors in supporting it. It then passed the original budget motion for the division, crafted by Bell, Sen. Dan Schmidt, D-Moscow, and Rep. Thyra Stevenson, R-Lewiston, on a 15-5 vote. It comes in slightly below the governor’s recommendation, because it removes another $271,500 expenditure for expansion of the welfare fraud staff. Schmidt said that program is in the midst of a “significant transition,” and the “timing of this investment may not be the wisest.”