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Medicaid faces tough cutbacks

Idaho agency says preserving core services is key

BOISE – Idaho Health and Welfare Director Dick Armstrong says the best remaining option for his agency to get control of rising Medicaid costs and demand is to cut programs that aren’t essential, required by federal rules or in some cases are not a matter of life and death.

More rollbacks in programs and services geared to the poor, disabled children and elderly are the grim reality of the economic recession, tight state budgets and ever-increasing demand for social safety net programs like food stamps.

As of December, more than 223,000 residents across the state were receiving food stamp assistance to help put food on the table, agency figures show.

“The economic conditions are driving our budget requests,” Armstrong told a panel of budget writers and lawmakers Monday who serve on House and Senate committees that oversee his agency. “Our agency’s 2012 budget is the biggest challenge I’ve faced as a director.”

The agency’s fiscal 2012 budget proposal comes in at $2.25 billion, an amount that would account for nearly 26 percent of the state’s general fund.

The majority, or 80 percent, of the agency’s budget is devoted to Medicaid, the federal-state program that helps pay for medical and dental care, prescription drugs, therapy for children and with disabilities and mental illness, among others. Armstrong’s budget for next year recommends $1.84 billion for Medicaid, up slightly from the estimated $1.80 billion for the current fiscal year and 39 percent from 2008.

But Gov. Butch Otter favors even less for Medicaid. The budget he presented to lawmakers last week asks the agency to get by with $25 million less for Medicaid, even as Medicaid caseloads – mostly children added by parents who lost their jobs – have soared by 21 percent since 2007.

The funding decrease would also trigger a $59 million reduction in federal matching money and an overall $84 million hit to Medicaid spending next year.

Armstrong said meeting the governor’s target means putting programs on the chopping block because the agency has already exhausted many of its other belt-tightening options.

He discounted efforts to make enrollment more difficult, saying Idaho’s Medicaid eligibility criteria are among the nation’s toughest. Scaling back the rate of reimbursement payments to care providers would force some to quit seeing Medicaid patients.

In the past two years, the agency has met shrinking budgets through furloughs, layoffs, temporary program cuts and looking for efficiencies. Last year, the agency closed 9 of its 29 field offices across the state and is now operating with 10 percent fewer employees – or 325 staffers – than 2008.

The combination of fewer staffers and more Medicaid clients has ultimately driven up caseloads, in some cases to a ratio of 1 staff member per 627 food stamp clients.

“The one realistic option is to trim benefits,” Armstrong said. “We are going to have to focus on preserving the core services that protect health and safety … services that literally are a matter of life and death.”

Lawmakers will have the opportunity to define the agency’s core services as they prepare their own budgets for 2012. But programs that could be eliminated or rolled back could include psychosocial rehabilitation for mentally ill adults, some types of hospice care, non-urgent dental care or home health nursing.


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