Idaho’s state general fund just got a $28.9 million one-time boost. It happened because the state’s Catastrophic Health Care program has been spending less than anticipated, both last year and this year, as more Idahoans have gotten health insurance. Gov. Butch Otter had recommended transferring $16.9 million in unspent funds from fiscal year 2015 from the CAT fund back to the state general fund; this morning, in the Joint Finance-Appropriations Committee, Sen. Dan Schmidt, D-Moscow, instead proposed a transfer of $28,892,700.  The fund still will have enough to continue covering its bills; you can read my full story here at spokesman.com.

“It’s a little embarrassing,” Schmidt said. “But if you remember last year, the actual request from the CAT fund and the governor’s recommendation was $32 million. And we said maybe it’ll be less than that, and we went ahead with $27 million. Well, it was quite a bit less than that.”

He said, “You guys all probably remember about three years ago, there was a bill that we did here in the Legislature that increased people’s access to health insurance.” That set up the state’s health insurance exchange, which has allowed close to 100,000 Idahoans to get health coverage, most with subsidies that make it more affordable. “And that has dramatically affected how much we’re affecting costs in the CAT fund,” said Schmidt, a physician. “So we’ve seen CAT fund costs go down. They aren’t going away. They aren’t going away. But they have gone down. And getting people insured has reduced costs for the general fund.”

“This, to me, is an example of a courageous effort both by the Legislature and our governor to accomplish this,” Schmidt said, “and I’m very happy that we’ve been able to do this. And I’m glad that we can return this to the general fund.”

The CAT fund is the state portion of Idaho’s system for paying the catastrophic medical bills of Idahoans who can’t pay up. Counties cover the first $11,000 of each bill from local property taxes; amounts exceeding that are picked up by the CAT fund. People whose bills are covered get liens placed on virtually everything they own, including their estates when they die, but relatively little is recovered.

JFAC Co-Chair Rep. Maxine Bell, R-Jerome, agreed with Schmidt that it’s good to see the money return to the state’s general fund. “And I’m grateful to those county people who strive diligently to make sure that this CAT fund is used in the way it’s intended to help out,” she said. “So we’ll use this to fight another battle or to do something else.”

Legislative analyst Jared Tatro said three factors appear to be contributing to the decline in CAT costs, with the Your Health Idaho exchange by far the biggest. The other two are 2010 legislation that required people applying for the fund to go through an eligibility process that first determines if they’re eligible for Medicaid; and the institution of medical reviews, in which the CAT fund has a contractor question the medical necessity of each service provided and rejects those not deemed necessary. Idaho’s Medicaid program largely covers only children and the disabled.

Sen. Shawn Keough, R-Sandpoint, the Senate co-chair of JFAC, said, “I do recall having to increase funding to the CAT fund in past years.” She said, “I agreed with Sen. Schmidt’s assessment,” but said she’s reserving judgment on the governor’s recommendation for $22 million in funding for the CAT fund in the coming year, fiscal year 2017. “We don’t want to over-appropriate scarce dollars, but we also don’t want to leave the counties in a bind,” she said.

Schmidt, who serves on the CAT board, said, “The costs are going down, they’re dropping off, and we’ve been seeing this now for a year and a half. … The demand is dropping off, and it’s because people have insurance.” Schmidt called Idaho’s state insurance exchange “a glowing success.”

However, he said he’s heard anecdotally that counties haven’t seen the drop-off. “They’re still getting claims,” he said. “They’re smaller claims.”

Total costs combined between the state and the counties were $36.3 million in fiscal year 2015, down from $51.5 million a year earlier. State costs were $19 million in 2015, down from $28.4 million in 2014. The program hit its peak in fiscal year 2012, at $55 million in costs, $38.6 million of that from the state and the rest from county taxpayers.

Schmidt said, “It’s a tough one to estimate. That’s, in my opinion, why this should be going away. It isn’t healthy for the economy. We need to do this differently. I wish we could talk about that.” He was referring to expanding Medicaid to cover those Idahoans who don’t make enough to qualify for subsidized plans on the insurance exchange; lawmakers have thus far been unwilling to consider the move. He noted that Idaho’s CAT program isn’t insurance; it’s a mechanism for paying catastrophic medical bills after they’re incurred.

“I believe people in the state of Idaho should have health insurance, and we have a way to do it,” Schmidt said. “It’s very affordable, and it will make health care very accessible.”

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