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Idaho's 2018 Medicaid Expansion Update
November 20, 2018
Parsons Behle & Latimer Healthcare Update


In 2010, Congress expanded Medicaid eligibility under the Patient Protection and Affordable Care Act (ACA), and two years later, it was largely upheld by the U.S. Supreme Court in NFIB v. Sebelius. This year, Idaho voters went to the polls and – by a 20 percent margin – passed Proposition 2, expanding Medicaid access for Idahoans. 

Proposition 2 is voter-initiated Idaho legislation created to change the law in two ways. First, consistent with the ACA, it relaxes the income-based requirements for Medicaid eligibility. Prior to the ACA, Medicaid was government health insurance reserved for and primarily accessible only to pregnant women, children, people with disabilities and low-income seniors. After the ACA, in those states which opted to expand coverage, Medicaid coverage was expanded to include all those Americans whose earnings fell below 133 percent of the Federal Poverty Level (FPL). Now, for the first time, adults in Idaho with incomes of up to 133 percent of the Federal Poverty Level (FPL) are eligible for Medicaid. 

Second, Proposition 2 language provides that the Department of Health and Welfare shall amend its Medicaid state plan within 90 days of passage, to accomplish the expansion.  

What are the next steps to implement this initiative?  First, Idaho must certify the election results by Dec. 6, 2018. 

Next, Idaho must amend and submit its plan to the Centers for Medicare and Medicaid Services (CMS) for approval. CMS has the authority to approve State Plan Amendments under assigned authority from the Secretary of Health and Human Services (HHS). Once Idaho submits its amended plan, CMS typically responds regarding approval within a few weeks.

Once the plan is approved, Idaho will receive federal financial funds for covered services provided to the newly-eligible Medicaid recipients at an adjustable rate. See SSA § 1903(a).  Those states which expanded Medicaid under the ACA in 2014 have enjoyed 100 percent federal matching funds for services rendered to newly-eligible recipients. Since then, the percentage of federal reimbursement has gradually decreased to what will be 93 percent in 2019 and 90 percent in 2020 and beyond.  See P.L. 111-148, as amended by P.L. 111-152; SSA § 1905(y). Idaho’s federal reimbursement rate for newly-eligible recipients, at the time Idaho’s expansion is active, is expected to be consistent with these rates.

The final action for Idaho lawmakers will be to decide how to fund the state’s share of Medicaid funding, which must be determined and funded before the “federal match” is provided. Funding is expected to be appropriated and available on July 1, 2019. As this effort advances in the legislature, any funding must come from specific, limited sources per federal statute. Idaho may generate its source of Medicare funding from either general state revenues (and this source must make up at least 40 percent of the non-federal share of Medicaid expenditures) see SSA § 1902(a)(2); intergovernmental transfers and certified public expenditures (which may not include federal funds), see SSA § 1903(w)(6)(A), 42 C.F.R. § 433.51; bona fide provider donations, see SSA § 1903(w)(1), 42 C.F.R. § 433.57; or provider and health care related taxes. See SSA § 1903(w)(1).  If provider and healthcare-related taxes are used, such taxes must be broad based, uniformly imposed throughout a jurisdiction, must cover a class of items and services and must apply to all providers for the items and services within that class.  See 42 C.F.R. §§ 433.68(c)-(e), 42 C.F.R. § 433.68(d).

With the passage of this historic voter initiative, providers can expect the opportunity for an increase in patients, which may translate into an increase in revenue. But there is still much to be decided regarding how the Idaho legislature will choose to fund the expanded program to take advantage of the expanded federal funds.


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