JFAC sets Medicaid budget; shows smaller increase than governor’s proposal

The big budget-setting has started in this year’s legislative session this morning, as the Joint Finance-Appropriations Committee voted 18-2 in favor of a budget for Medicaid for next year that shows a 2.1 percent increase in state general funds, and 3.5 percent increase overall. That’s slightly lower in overall funds than the governor’s recommendation, and significantly lower in state general funds; Gov. Butch Otter’s proposal came to a 3.7 percent increase overall and 3 percent in state general tax funds.

“We are beginning to see a slowdown in Medicaid – it’s not growing as fast as the rest of the budget,” said Sen. Dan Johnson, R-Lewiston. Other than non-discretionary adjustments, which include required increases related to caseloads and statutory requirements, he noted, “We’re actually seeing a slowdown.”

Just two JFAC members voted against the appropriation: Sens. Sheryl Nuxoll, R-Cottonwood, and Dean Mortimer, R-Idaho Falls. Nuxoll offered an alternative proposal that was identical, except for removing $870,000 in state general funds that would attract nearly $3 million in federal matching funds to offset what otherwise would have been a cut in reimbursement to primary care doctors who see Medicaid patients. Sen. Dan Schmidt, D-Moscow, said the difference is between Medicaid and Medicare reimbursement rates, which he said, “ends up being about a buck a patient.” He said, “It is a way to keep them invested in seeing Medicaid patients, and with the federal match, I think it’s worth the investment.”

Rep. Luke Malek, R-Coeur d’Alene, said, “This is a barrier to access issue.” Cutting the reimbursements, he said, would be “a disincentive to providers to taking Medicaid patients.” Nuxoll’s alternative budget proposal drew just three votes, hers, Mortimer’s, and that of Sen. Steve Bair, R-Blackfoot. The JFAC-approved budget bill needs approval from both the House and Senate and the governor’s signature to become law, but budget bills rarely change once they clear the joint committee.

All in all, the Medicaid budget, which makes up the vast majority of spending for the state’s largest agency, Health & Welfare, totals $502.6 million in state general funds. The federal government pays more than two-thirds of Medicaid costs; all told, the state-federal program for next year would total $2.1 billion.