BOISE, ID – Idaho Gov. Brad Little approved a bill that calls for nearly $22 million in budget cuts to Medicaid disability services.
The governor signed House Bill 863 on Thursday, after the legislation cleared the Idaho House and Senate. The bill calls for cutting provider reimbursement rates for residential habilitation services by $21.8 million next fiscal year. That was on a list of cuts that Little recommended the Legislature consider to balance the state’s budget.
This year, state lawmakers enacted deep, across-the-board spending cuts across several areas of government. But they largely spared Medicaid from those cuts — except for this bill, and a companion budget bill that officially enacts the cuts. That budget bill, Senate Bill 1435, passed the Senate on Thursday.
House Bill 863 calls for cuts by reducing pay raises for providers that the Legislature approved in 2022. Those raises were meant to expand services and use a new budget tool, which didn’t end up happening because of a court order in the KW v. Armstrong lawsuit, the bill’s fiscal note says.
The cuts, combined with the Medicaid rate cuts made last year, would amount to a 10% reimbursement rate reduction for residential habilitation providers. But after the cuts, lawmakers behind the bill say providers would still be left with reimbursement rates that are 33% over where they were four years ago.
How the Legislature decided to cut Medicaid disability services budget
Many lawmakers viewed Medicaid budget cuts as a choice between repealing Medicaid expansion and cutting from services for people with disabilities.
This month, the proposal for disability cuts — backed by the chairmen of the House and Senate Health and Welfare committees — faced delays twice.
When Rep. John Vander Woude, R-Nampa, first brought an earlier version of the bill, his committee voted to delay a decision on the bill. Days later, he brought what he said was an alternative: A bill to repeal Medicaid expansion. The next day, his committee approved a new bill for disability cuts, which widely passed the full House without debate.
But in the Senate, the bill had a tougher time.
In the Senate Health and Welfare Committee, patients and providers spoke out.
Before Katie Hodges received residential habilitation services, she told lawmakers she was institutionalized — in jails, prisons and hospitals. She read a prayer and asked lawmakers to not make the cuts.
“Lord, I pray that they make the right decision. And that whatever that may be, that you give them wisdom and that you give them the help they need to help people with disabilities all over Idaho,” Hodges said.
Teton Supported Living Owner Jodi New said the cuts could push some providers to close. Ritchie Eppink, the lead attorney in the KW v. Armstrong lawsuit, also told lawmakers that the cuts could open the state to more litigation risks.
The committee voted to delay the bill after Sen. Brian Lenney, R-Nampa, tried to reject it.
“Real fiscal conservatism would find the $21.8 million somewhere else that doesn’t involve breaking a promise we made to the people caring for Idaho’s most vulnerable citizens,” he said in committee.
In the Senate, the bill passed on a close 19-15 vote. Nine Republicans joined the Senate’s six Democrats in opposition.
Bill cosponsor Sen. Julie VanOrden, R-Pingree, closed debate with a phrase common in the Statehouse.
“The money follows from the state to the providers to the caregivers. Somewhere along there, maybe somebody needs to tighten the belt somewhere,” she said. “And I believe that it could happen. These facilities could still stay open. … That might mean, as a provider, I don’t take as much money, but I still pay the people that are doing the work the amount that they need.”
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