The Medicaid budget proposed this morning by Rep. Fred Wood, R-Burley, zero-funds all line items and holds Medicaid to an overall 3.1 percent increase, though it's a cut in state funding. Caseload growth is covered, but holdbacks from this year are made permanent; all pricing increases for next year are frozen except those mandated by federal law; and Health & Welfare is ordered to negotiate pricing reductions. "It's ugly, but you just can't spend what you don't have, and that's the reality of the situation," said Sen. Joyce Broadsword, R-Sagle. She noted that the proposed budget is a 3.5 percent cut in state general funds - less than the 7 percent or more being cut from most other areas of state government. "We're trying our best to make sure that people who need these services get these services," she said. The budget plan calls for $23 million or more in bills from this year to be carried into next year; relies on savings from hospital assessment legislation that hasn't yet passed; and still anticipates that additional reductions may have to be made by the governor and department during the year.

Sen. Nicole LeFavour, D-Boise, said, "From what I can tell from all of this, we're reducing the budget beyond where we can make it work. ... We're just going to kind of put it out there and hope the governor and Health & Welfare can work it out - I don't even know that they can." Wood, a doctor, said he's confident that it can work; he said steps like creating a drug formulary and reducing physician fees could bring substantial savings to Medicaid. One thing that the department and governor can't change: Eligibility criteria. Said Broadsword, "We can't micro-manage the department and tell them each and every thing that they should and shouldn't do. They have a responsibility to protect the people that they serve." Wood noted that the Medicaid budget took deep cuts this year.