BOISE, ID – To balance the state’s budget, Idaho Gov. Brad Little’s plan says the state could cut Medicaid services for dental care and people with disabilities.
As part of the governor’s recommendation for $22 million in extra Medicaid cuts, he says the state could remove Medicaid dental coverage for adults, and home and community-based services, which are meant to help people with developmental disabilities live outside of institutional settings.
The governor’s budget chief, Lori Wolff, told the Idaho Legislature’s budget committee on Tuesday that following through on many of Little’s cut ideas would require a bill changing state policy.
“These decisions are difficult,” Wolff told the Joint Finance-Appropriations Committee, or JFAC. “And we are going to have to work closely together to decide how we do this.”
JFAC’s new co-chair, Rep. Josh Tanner, an Eagle Republican, seemed skeptical of the governor’s budget proposal.
“Medicaid growth is crowding out every other priority,” Tanner wrote in a statement. “Instead of presenting real reforms, the Governor leaves behind a Medicaid budget hole based on unspecified cuts, shifting the toughest decisions to the Legislature.”
Idaho eyes Medicaid cuts after state tax cuts, and recent federal and state Medicaid cuts
Idaho is facing multimillion projected budget shortfalls — about $40 million this fiscal year, and more than $500 million next fiscal year — after years of state tax cuts. State officials are returning to talks of cutting Medicaid after passing a massive Medicaid cost-cutting bill last year, and after President Donald Trump’s “One Big Beautiful Bill Act” this summer deeply cut federal funds for Medicaid.
Years after the Legislature cut adult dental Medicaid coverage after the Great Recession, state lawmakers restored the benefit as projections showed dental coverage actually saved the state money. After the federal “big beautiful bill” cut Medicaid this year, some Idahoans feared that optional Medicaid benefits like home and community-based services could face cuts, the Idaho Capital Sun reported.
Idaho Voices for Children Policy Director Hillarie Matlock said the Legislature needs to let policies from last year’s Medicaid laws from the state and federal government play out.
The governor’s proposed cuts would “only drive up the state’s costs down the road,” she said.
“If cost containment is the long-term goal, cutting any of these services is not the way to do it,” Matlock told the Idaho Capital Sun in an interview. “These services are essential to Idahoans with disabilities, children and seniors, and will only drive up costs down the road.”
In a statement, the governor’s spokesperson Joan Vargas said the cut ideas “were considered to meet the state’s constitutional requirement for a balanced budget.”
“Adult dental coverage and home- and community-based services were included because they are optional Medicaid benefits under federal law, not mandated by the federal government,” she wrote. “While reductions have impacts, these options were considered to meet the state’s constitutional requirement for a balanced budget.”
What Idaho Medicaid services is the governor targeting for cuts?
The governor proposed a total of $45 million in Medicaid cuts next fiscal year. About half of that would come from extending 4% doctor pay cuts. The other half – the $22 million in extra Medicaid cuts – would come from a list of options for other Medicaid cuts.
Little’s list of Medicaid cut options didn’t recommend repealing Medicaid expansion, as some Republican state lawmakers are considering.
Here’s what options the governor proposed:
- Rate reductions: To hospital rates, to residential habilitation, and even removing administrative costs for contracts for managed care organizations, which are private companies that run Medicaid benefits.
- Removing services made up the bulk of the governor’s proposed options for Medicaid cuts. Services that could be cut include: adult dental services, home and community-based services, pharmacy benefits for adults who aren’t on Medicaid expansion, adult prosthetics and orthotics, adult in-home nursing services, adult chiropractic services, adult audiology services, adult vision services, hospice services, case management support, and services for physical, occupational and speech therapy.
It’s not immediately clear if services called for removal would be entirely ended under the governor’s proposed cuts.
Last week, the Idaho Department of Health and Welfare announced it was capping visits for occupational, physical and speech therapy at 20 per year. Any more visits need prior authorization, but some services would be exempt from the cap, according to the agency’s announcement.
In a statement, Department of Health and Welfare spokesperson AJ McWhorter said the change aligns Idaho’s programs with other states. The agency doesn’t know how much the change will save the state, he said.
“Idaho Medicaid regularly reviews its policies to ensure consistency with best practices,” McWhorter said. “Prior to this change, a provider had to order physical therapy, occupational therapy and speech therapy, but Idaho Medicaid did not authorize that the service was medically necessary before it was rendered.”
After cutting Medicaid dental coverage post-recession, Idaho restored service after ER costs surged
After the Great Recession, the Idaho Legislature in 2011 cut Medicaid dental coverage for adults in hopes to save money.
But three years later, the Legislature was already working to restore adult dental Medicaid coverage after emergency-room costs surged, the Associated Press reported.
In 2018, as the Legislature approved restoring non-emergency dental coverage for adults, the move was projected to save the state $2.5 million, the Spokesman-Review reported.
Idaho Capital Sun is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Idaho Capital Sun maintains editorial independence. Contact Editor Christina Lords for questions: info@idahocapitalsun.com.
