At the height of the increased matching rate that the federal government offered states for Medicaid, Idaho was getting a 79.18 percent federal matching rate for the program, meaning the state only had to fund 20.82 percent of the program's costs. Now, the federal match rate is stepping down, Medicaid administrator Leslie Clement told lawmakers. This month, the matching rate dropped to 76.18 percent, and starting in April, through the end of the year, it will drop to 74.18 percent. The result is an increased funding responsibility for the state of $29.7 million; Gov. Butch Otter has recommended funding that in the current year from the Millenium Fund.

In July, August and September, the federal matching rate is expected to drop to 68.85 percent; then, it rises to 70.23 percent for October through the following June. That means a $139.3 additional cost for the state, which many have referred to as a funding "cliff." The matching rate is called the Federal Matching Assistance Percentages, or FMAP. It's just one of the factors in the Medicaid budget outlook for next year, along with growing caseloads; plans to impose additional taxes, or "assessments," on hospitals and nursing homes to make up some of the shortfall; and the governor's recommendation to cut $25.2 million in Medicaid benefits or services, which results in a corresponding loss of $58.8 million in federal funds, for a total cut to the program of $84 million.