BOISE, ID – Idaho health officials say it’ll take years to switch all Idaho Medicaid benefits to being managed by private companies.

Through a sweeping bill meant to cut Medicaid costs, the Idaho Legislature this year directed the Idaho Department of Health and Welfare to change a range of Medicaid policies — including to pursue switching Medicaid benefits to being run by private companies.

That model, called managed care, is used widely across the country.

Right now, Idaho Medicaid already uses managed care  — somewhat. But it’s more of a patchwork approach, where some services are managed by the state health department, some by managed care organizations, and some by doctors’ offices.

Shifting Idaho Medicaid to managed care will take time to do well, Idaho Medicaid Deputy Director Juliet Charron told a panel of state lawmakers late last month.

The Idaho Department of Health and Welfare expects the new comprehensive Idaho Medicaid managed care contract to start in 2029, following years of prep work, she told the Idaho Legislature’s Medicaid Review Panel on May 22.

“We have been evaluating all of the different scenarios and timelines under which we could implement this — looking at it as early as 2027 or 2028 — and have determined” that going much earlier is risky, Charron said. “Because you’re going to start to have pieces overlapping throughout this. And that will be particularly challenging for our provider communities.”

Medicaid is a largely federally funded health care assistance program that covers about 260,000 Idahoans, including low-income earners, people with disabilities, pregnant women, and some older people. Roughly 92,000 Idahoans are enrolled in Medicaid expansion, a voter-approved policy that raised the income eligibility cap.

Medicaid work requirements could come under new law

The new Idaho Medicaid cost cutting bill also called for Idaho to seek federal approval for Medicaid work requirements for able-bodied adults. The Idaho Department of Health and Welfare plans to apply for that by July 2026.

The federal spending and tax cut bill being considered by Congress might ease the process for Idaho to seek Medicaid work requirements.

Instead of applying for a Medicaid waiver that could temporarily allow for work requirements, Idaho could seek a longer-lasting state plan amendment for Medicaid work requirements — if the federal bill becomes law, Charron said. (The bill would require nationwide Medicaid work requirements years later. After passing the U.S. House, it heads to the Senate, where changes are expected.)

Other states’ experiences and a federal watchdog report suggest costs for Medicaid work requirements are high, the Idaho Capital Sun previously reported.

Since almost half of Idahoans on Medicaid are already working, some advocates say work requirements are effectively just expensive administrative barriers to access the program.

Idaho Medicaid’s management is split up. A new contract would replace existing ones. 

Overall, only 6% of Idaho Medicaid enrollees are in comprehensive managed care — the roughly 15,000 Idahoans enrolled in managed care plans who are dually eligible for Medicare and Medicaid, Idaho Idaho Medicaid Deputy Administrator Sasha O’Connell told the legislative panel.

Idaho’s existing Medicaid managed care contracts mostly carve out private management for certain benefits, like mental health, medical transportation and dental.

That split makes it complicated for the state to oversee, O’Connell said.

“What this has led to is we have particularly high turnover, I would say, in state agencies. And I think that that happens in Medicaid as well,” she said.

The various contracts have put Idaho Medicaid’s limited staff in a cycle of “amending these contracts constantly,” she said, instead of putting the contracts up for a new competitive bid, a process called procurement.

“Because procurement is such a huge lift,” O’Connell said.

Idaho is also on track to end doctors’ offices managing Medicaid benefits next year, Charron told lawmakers. The new Idaho Medicaid cost cutting bill called for the end of that model, called value-based care, which is unique to Idaho and has existed for a few years.

Idaho senator: Asking the private company how providers are doing is ‘Like asking the fox, ‘How’s the hen house?’

The new Idaho Medicaid managed care contract is likely to become the biggest contract given out by the state of Idaho.

Idaho’s contract for the company Magellan to run mental health Medicaid benefits is already the state’s largest contract, initially pegged at $1.4 billion over four years.

Like under Idaho Medicaid’s first managed care mental health organization, Idaho Medicaid providers have reported payment delays from Magellan, the Idaho Capital Sun reported.

Sen. Kevin Cook, R-Idaho Falls, raised that issue to Idaho health officials.

“You’re saying, I’m getting reports back from the (managed care organization), and they’re saying, ‘Everything is great. All of our providers are happy. They’re loving it,’” Cook said. “‘That’s like asking the fox, … ‘How’s the hen house?’”

Idaho’s new managed care contract slated to go to three companies

Idaho’s existing managed care contracts will be phased out for the broader contract to come.

“Idaho is a very large state. But our health care infrastructure is somewhat limited. And people access health care all over the state. Frequently, we are sending Medicaid participants to different parts of the state, based on the service that they need,” Charron said.

The new contract will task three different managed care organizations to run Idaho Medicaid benefits, for a few reasons, she explained, like:

• Federal requirements for Medicaid enrollees to have choice under managed care;
• Creating competition between companies to drive efficiencies; and
• Redundancy, in case a plan terminates.

Before Idaho launches the new managed care contract, Idaho has a lot of preparation to do, state health officials say. Like engaging stakeholders, seeking out more information and contracting out for actuarial services, a pharmacy benefits manager (PBM), a new enrollment broker for Medicaid enrollees to pick managed care plans, and Idaho Medicaid’s information system.

This story first appeared on Idaho Capital Sun.