State catastrophic health fund hemorrhaging

BOISE – Local property taxpayers could be forced to pay the mounting costs of a cash-strapped health care program that’s running more than $4 million over budget this year.

Legislative budget writers already knew they would have to put more taxpayer support into the Catastrophic Fund, the state-county partnership that costs the state $12.1 million a year now. Gov. Dirk Kempthorne had recommended another $1.7 million in emergency spending for the current budget year.

But program administrator Blake Hall warned the Joint Finance-Appropriations Committee on Tuesday that he needs more than that, and the $4 million he’s requesting won’t fully plug the hole.

“We’re broke – we don’t have any money left,” Hall told the panel. “We keep pushing bills into the next year and postponing the day of reckoning.”

Lawmakers think the solution may lie in changing the longstanding partnership under which the state and counties share the costs. Right now, the county pays the first $10,000 in medical costs for indigents who have no place else to turn. Lawmakers asked Hall what would happen if counties had to pay the first $15,000.

The $10,000 figure has remained constant since 1984. If the state’s obligation last year had been limited to health care costs above $15,000, the state could have avoided paying 292 claims out of 811, for a savings of $3.1 million, according to Hall’s analysis.

This year, the state could have avoided paying $4 million – exactly the amount of money Hall says he needs to balance his books for the budget year that ends June 30.

Committee co-chairwoman Maxine Bell of Jerome said the $10,000 figure should be reconsidered.

“We should have been indexing this when we began down this road,” Bell said.

But Hall also warned that changing the state’s obligation would put pressure on county property-tax supported budgets, which can only increase by up to 3 percent a year. For some counties, the additional cost “would eat up more than 3 percent, requiring reductions in services.”

Hall’s analysis shows Kootenai County would have had to pay an extra $231,000 in additional health care costs in 2003-2004, had the $15,000 deductible been in place. Ada County would have had to underwrite more than $930,000 and Canyon County’s costs would have been $221,000.

“That would be a significant impact,” said Canyon County Commissioner Matt Beebe, who sits on the board that oversees the catastrophic health care account.

“It would just slay some counties,” Lewis County Commissioner LeAn Trautman agreed. But she added that the state and counties may need to compromise on a figure.

The irony, which lawmakers didn’t acknowledge, is their interest in pushing costs off to counties is not unlike what’s occurring in Medicaid, the state-federal health care partnership for the poor and disabled. The federal government, looking to reduce spending deficits, has been putting more pressure on states to pick up more costs.

Other options, laid out by Hall, include raising beer and wine taxes to pay for the additional costs. That’s been a nonstarter for years, in part because of the strong lobby that opposes it.

The state could limit the access of illegal immigrants to the program, but how much money that would save is the subject of intense debate. Hall said records on that issue are sketchy, although he noted one case involving an illegal immigrant in Payette County that will cost taxpayers $400,000.

A proposal to restrict access to the program is expected to be introduced in a Senate committee today.