Idaho Could Save Money By Expanding Medicaid

Molly Messick / StateImpact Idaho

Speaker of the House Lawerence Denney said this week that he's opposed to implementing "Obamacare" in Idaho.

Gov. C.L. “Butch” Otter said this week that he will form working groups to study the two big questions arising from the Supreme Court’s health care ruling.  Those are: should Idaho establish a state-run health insurance exchange? And should it adopt the Medicaid expansion provided for under the Affordable Care Act?

One of the main arguments that favors Medicaid expansion is that the state would actually save money by expanding eligibility, given the substantial costs of the state’s Catastrophic Health Care, or CAT, fund.  (That fund pays the medical bills of indigent Idahoans, who, as a recent report from the fund puts it, “have fallen through the cracks of the welfare system, or have inadequate insurance to meet the financial responsibilities when their medical costs are of catastrophic proportions.”)

Rep. John Rusche (D-Lewiston) made that CAT fund savings argument when we reached him the day of the decision.  “Based on the amount of support from the federal government, it would be a financial benefit to expand Medicaid,” he said.  Sen. Dean Cameron (R-Rupert) echoed that thought.  Rusche, a retired medical doctor, followed up with an op-ed on the subject sent to media last week.

Rusche believes Idaho will save money by opting into the expansion because the federal government will pick up much of the tab — 100 percent of states’ expansion costs for the first two years, phased down to 90 percent by 2020.  The Idaho Department of Health and Welfare has not done its own assessment of what the costs of an expansion might be to the state, but a Kaiser Family Foundation study puts the amount at between $100 million and $133 million between 2014 and 2019.

The CAT fund costs, on the other hand, now amount to about $60 million annually, according to director Kathryn Mooney.  Roughly $35 million of that comes from the general fund, and counties pay the rest.

Mooney says nearly all of those whose costs of care the CAT fund picks up would be eligible for Medicaid, were the program expanded.  “Overall, in terms of who’s going to be covered and whether the expansion would take over most of my program?  Yeah, that’s a given,” she said.

CAT fund board chairman Roger Christensen, a Bonneville County Commissioner, agreed.  “The majority of the people who are covered by the CAT would be picked up by the expanded Medicaid rules,” he said.  “We basically deal with people who are low-income and without other resources.”

Doing the math, it appears the state could save in the neighborhood of $200 million dollars by going along with the expansion.  But, Christensen observed, “Pretty much it’s going to be a policy decision by the legislature.  Our job is provide the numbers and the information to the legislature and the governor, among others.”

That’s where it gets tricky.  While the governor has adopted a wait-and-study approach to the questions of the health insurance exchange and the Medicaid expansion, Republican lawmakers are not so amenable to implementing large facets of the law they call “Obamacare.”  Take this, from a joint statement House Speaker Lawerence Denney (R-Midvale) and House Majority Leader Mike Moyle (R-Star) issued Wednesday.  “Resistance usually comes at a cost, but the state of Idaho must resist Obamacare,” they said.

CAT fund board chairman Christensen predicts much discussion ahead.  “The Legislature tries to find the balance between practical decision-making and political decision-making,” he said.  “I’m sure there will be a robust debate.”