The most significant budget request in the Medicaid budget for next year isn’t the biggest in dollars. In fact, the request to transform Idaho’s children’s mental health services – for children with serious emotional disturbances – calls for hardly any increase in state spending next year. But it will result in more than tripling Idaho’s services for those kids, starting next year.
The request is a transfer – $1.1 million would come out of the Division of Behavioral Health budget, where the services are provided now entirely with state general tax funds, and the same amount would transfer into the Medicaid budget. As a result, it would trigger federal matching funds at the roughly 71-29 percent federal-to-state matching rate that Idaho gets for its Medicaid program.
“While the state general fund impact is neutral,” Medicaid Division Administrator Matt Wimmer told the Joint Finance-Appropriations Committee this morning, “we’re basically moving general funds to Medicaid so we can draw down that federal match and meet those needs.” As a result, Idaho would get $3 million in federal matching funds for the program next year that it doesn’t receive now, to bring the total program to $4.15 million.
Legislative budget analyst Jared Tatro said while the fiscal year 2018 budget request for benefit payments is budget-neutral for the general fund, there still are some increases associated with additional positions; overall, between the 2018 request and a supplemental request for the current year, there's a net increase to the general fund of $946,200.
The move is part of the settlement of the long-running Jeff D lawsuit, which has been in the works for a whopping 35 years. The funding request will allow Idaho’s program to move to a family and team approach, “so that children with those needs will have them met in a comprehensive fashion rather than piecemeal,” Wimmer told JFAC. There’s also legislation pending in the germane committees to accomplish the change, he said. “By building a comprehensive system of care to meet their needs, we hope to have a strong positive impact on their lives,” Wimmer said. “They’re at significant risk for poor life outcomes like unemployment, criminal behavior and incarceration.”
He said, “This is a long-term investment in those individuals and in Idaho’s future, and that is really just a very exciting program. I just feel blessed to be able to participate in that.”
Overall, Gov. Butch Otter is calling for a 3.6 percent increase in Medicaid funding next year in state general funds, 3.6 percent overall. The biggest driver of the increase is an increase in caseload, even as utilization of services per patient is dropping.
“What we’ve seen in recent years is an increase in the number of healthy children coming onto the program,” Wimmer told lawmakers. “They don’t use a ton of services.” He added, “We’ve also seen an uptick in the number of people who are disabled applying for support on the program. As to what is driving that, your guess is probably as good as mine. We do have an aging population.”
More than 300,000 Idahoans rely on Medicaid for health care; only the very low-income qualify. Hospital costs are by far the biggest expense for the program, though per-person hospital charges in Idaho’s Medicaid program have fallen since 2015. At the same time, costs for services for people with developmental disabilities have been rising on a per-person basis; the state is making some changes in those services pursuant to the settlement of a federal lawsuit.
Seventy-four percent of those on Medicaid are children or pregnant women; they account for only 30.8 percent of the costs. Most of the costs are driven by clients who are disabled or elderly.
Idaho’s Medicaid program expects to save $386,600 in general funds, $1.4 million total, next year on its non-emergency medical transportation costs, because the state on July 1 signed a contract with Veyo to take over those services from the previous provider. Veyo’s $70.4 million contract for the next three years is $6.59 per client per month, which is 41 cents less than the previous contractor charged.
JFAC Co-Chair Sen. Shawn Keough, R-Sandpoint, said, “I know that some of us on this committee have questions about the non-emergency medical transportation, but we are continuing to work through those questions.” After numerous complaints about Veyo’s services at a public hearing last week, the House and Senate Health & Welfare committee chairmen said they plan to hold hearings on the issue.