Medicaid, the state-federal program that provides health care to the poor and disabled in Idaho, is up for its budget hearing in the Joint Finance-Appropriations Committee this morning. Medicaid makes up 79.7 percent of the Department of Health & Welfare’s budget. The governor’s proposed budget for the program for next year calls for $515 million in state general funds, which makes up 23.2 percent of the total costs. Federal funds cover 63.1 percent of the costs; receipts, 12.3 percent; and dedicated funds, 1.4 percent. Nearly all the spending – 96.9 percent – goes to direct payments for services to providers, a budget category known as “trustee and benefit” payments. Just 2.4 percent goes to the program’s operating costs, and 0.7 percent for personnel.

Lisa Hettinger, division administrator for Medicaid, is presenting the budget proposal today. The governor’s recommendation calls for an increase in state general funds next year of 2.4 percent.

“We are indeed the largest piece of the budget for Health & Welfare, at 79.7 percent,” Hettinger told lawmakers. Still, she noted, “Idaho Medicaid’s growth is not as robust as the rest of the nation.”  

“Ninety percent of those that Medicaid services are children, the elderly and the disabled,” Hettinger said. Of 288,704 people enrolled in Idaho’s Medicaid program, 217,354 are children.

The total amount Medicaid would spend on trustee and benefit payments in next year’s budget proposal, from all funds, is $2.145 billion. “That’s $2.1 billion going back in to the economy for payments to private sector providers,” Hettinger said.

Costs per participant have declined, she said, “largely due to the influx of healthy children that we received” as people signed up for the state insurance exchange – and discovered their kids qualified for Medicaid. One cost driver that’s up: Generic drugs, whose costs unexpectedly soared 28 percent in 2015. “And of course, that makes up the majority of the expenditures that we make on drugs,” Hettinger said. “So that is again what is driving some of those cost increases that are non-discretionary.”