BOISE, ID – Without debate, the Idaho House passed on a party-line vote Thursday a bill that calls for nearly $22 million in budget cuts to Medicaid disability services.
House Bill 863 calls for $21.8 million in cuts to pay rates for residential habilitation providers. The bill is the Legislature’s response to Gov. Brad Little’s call for $22 million in Medicaid cuts, bill sponsor Rep. John Vander Woude, a Nampa Republican, said on the House floor Thursday.
The bill itself lacks a clear mechanism for the cuts, which are meant to come by reducing pay raises 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, the bill’s fiscal note says.
In the House Health and Welfare Committee hearing Tuesday, Vander Woude told lawmakers that he didn’t expect the cuts would push businesses that provide residential habilitation services to close.
After the cuts, he said, providers would still be left with reimbursement rates that are 33% over where they were four years ago.
“I think they’re gonna have to probably tighten their belt some, as any business would if the income drops a little bit,” Vander Woude said in committee on Tuesday. “I don’t see where they would have to shut down.”
The Idaho House passed the bill Thursday on a 60-8 vote. All eight House Democrats who were present voted against the bill. Two lawmakers, a Republican and a Democrat, were absent for the vote.
The new residential habilitation cuts bill would also require the Department of Health and Welfare to audit providers. That is expected to cost $850,000 from the state’s general fund.
The bill says information from those audits will be used to “develop payment rates, subject to legislative appropriation.” Those rates, the bill says, would “include allocations to direct care worker wages, employee-related expenses, program-related expenses, and general and administrative costs.”
The bill now heads to the Senate. To become law, Idaho bills must pass the House and Senate, and avoid the governor’s veto.
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