New needy seeking state’s help

BOISE – People who’ve never been out of work before are increasingly flocking to Idaho’s Health and Welfare Department to apply for help including food stamps to Medicaid, state officials told lawmakers Tuesday.

“Growing numbers of families and individuals … are coming through our doors seeking assistance,” said Health and Welfare Director Dick Armstrong. “Many of them have not been out of work before, and may not have applied for assistance.”

Armstrong said with this new population of the needy, he’s confident that state aid can help them get back on their feet so they can rebound. “With your support, we can have stabilized families during this time of critical need,” he told the Legislature’s joint budget committee, “and by doing that, when the economy does recover, which it will, Idaho can emerge from this even stronger than it was before.”

But for now, the budget is extremely tight – so tight that Gov. Butch Otter’s recommendation for funding Health and Welfare programs next year, a 7.5 percent cut from this year, includes an anticipated $40 million windfall from a national economic stimulus package.

If that doesn’t happen, Senate Finance Chairman Dean Cameron, R-Rupert, said, “That’s another $40 million we’ve got to find.”As state lawmakers began three days of budget hearings on Health and Welfare programs, state Medicaid administrator Leslie Clement warned them that cutting the program that provides health insurance for the poor and disabled doesn’t pay off during tough times.

“In economic downturns, the corresponding loss of federal funds magnifies the impact of state fund reductions,” Clement noted. “Generally, for every $3 reduction in state funds, $7 is returned to the federal government.” So cutting state funding for Medicaid means losing the federal funds, too; Idaho gets about $7 from the federal government for every $3 it spends on Medicaid.

Certain Medicaid programs are federal requirements, Clement told legislative budget writers. Some states offer lots of optional programs, too, but Idaho offers few. “We are the third most restrictive state in the nation relative to eligibility,” she said. Among the optional categories: The Children’s Health Insurance Program, or CHIP, which now has 27,000 Idaho children enrolled. The Katie Beckett medically needy program enrolls 2,100 children. Twelve thousand adults receive community-based services.

An $825 billion economic stimulus plan developing in Congress and backed by President Barack Obama is expected to boost funds for unemployment benefits, food stamps and Medicaid. Other states are also gearing up for the money.

Clement told lawmakers that Idaho could get an additional $10 million for every 1 percent that the federal government increases its share of money for Medicaid. At present, the federal government pays about 70 percent of Idaho’s Medicaid costs, with state taxpayers picking up the rest. Clement’s agency hopes the government will boost its share to at least 74 percent, or by about $40 million.

The vast majority of the Health and Welfare budget – 82 percent – goes to direct treatment services, primarily for low-income residents and the disabled.

When Clement prepared her fiscal year 2010 Medicaid proposal, she originally wanted $443.8 million in Idaho general tax revenue. That’s a roughly 20 percent increase from the original 2009 appropriation, to account for inflation and additional low-income people added to Medicaid. In his budget proposal, however, Otter recommended $366.6 million, forcing Clement to come up with about $77 million in proposed cuts to services.