How does the Idaho Legislature set the Medicaid budget during a pandemic?

Idaho is heading into year three of a pandemic, with a whole lot of money.

The state projects a record budget surplus of $1.6 billion when the next fiscal year begins on July 1.

Idaho’s health care sector has been battered and bruised. But it has plenty of competition as lawmakers debate how to spend their overflowing coffers during this legislative session.

“It’s almost easier when you don’t have money to spare,” said Toni Lawson, Idaho Hospital Association’s vice president of government affairs. In those lean years, she said, “the Legislature makes tough decisions and makes cuts and goes home. But when they have a lot of money, everybody has great ideas about what to do with that money.”

Hospitals used millions of dollars of state and federal support to keep their beds open in 2021 — paying a premium for overtime, extra shifts, hiring bonuses and travel nurses.

Idaho Medicaid isn’t the only source of payments to those health care systems and hospitals. But it is one of the largest, with 409,741 Idahoans enrolled as of November.

Before a ballot initiative forced the expansion of Idaho Medicaid, typically fewer than 300,000 people relied on the public insurance program. The expansion kicked in Jan. 1, 2020, three months before COVID-19 officially arrived in Idaho.

But even before the pandemic, Medicaid claims started to balloon from people who’d been waiting for health care they couldn’t previously afford.

“We’re very nervous” about Medicaid funding, Lawson said. “This has been such an unusual year, as well as the previous year, given the types of hospitalizations that have happened.”

“We will definitely be watching that as well,” said Susie Keller, CEO of the Idaho Medical Association.

The question, though, is: What numbers can you look at, when deciding on a health care budget in a pandemic? It’s complicated for multiple reasons.

• Medical claims for Idahoans who needed costly health care in 2021 may not be fully processed yet. Health care billing is not always straightforward and prompt, and when a patient needs complex medical care, that often means claims and payments for multiple organizations and companies.
• For months this year, Idaho health systems and hospitals had to cancel or postpone surgeries and procedures that usually would be performed.
• And finally, COVID-19 has been an aberration. Thousands of Idahoans required hospital care for the disease. Some of them spent weeks in costly intensive care units, only to be discharged with ongoing medical needs to care facilities. Some of them needed rehabilitation, oxygen, physical therapy, dialysis, air transportation, even organ transplants.

“And so, our concern is that we’re going to look at some of these outlier numbers in utilization, high and low, and look at them as a trend, and try to make budget decisions and policy decisions that will go for the next 10 years,” Lawson said.

The Medicaid budget set by Idaho lawmakers for this fiscal year was $769.7 million in state general funds. With enhanced Medicaid matching funds from the federal government, the total budget amounted to $3.7 billion, the Idaho Press reported last spring. That was just shy of the budget requested by Gov. Brad Little.

That was a major increase over the previous year. Most of that increase came from federal tax dollars, as opposed to state tax dollars, but it raised the eyebrows of Idaho legislators.

The Joint Finance-Appropriations Committee and legislative leadership looked at the Medicaid budget last year “and said, ‘We want to address sustainability, and we want to look at reigning this in,” Lawson said.

JFAC is scheduled to hear from the Idaho Department of Health and Welfare on Jan. 31.

“We have money right now. We have money in the bank. We have federal dollars available,” she said. “If we’re not going to use them for a once-in-a-century situation, when are we going to use them?”