In a quick move right before Labor Day, the Idaho Department of Health and Welfare announced plans to cut reimbursement rates for Medicaid providers by 4%. The Department, which is currently accepting public comment on the proposed cuts, cites rising health care expenses as its justification for the cuts. Health leaders in the state are already saying these cuts could push some doctors’ offices to stop accepting Medicaid and some are saying this will cause them to close their doors altogether.
These cuts, which follow Governor Brad Little’s executive order that all state agencies reduce their budgets, illustrate the intense pressure that state budgets are already facing and is only going to get worse. As readers of the Say Ahhh! blog know, deep, damaging cuts to Medicaid in the budget reconciliation law (H.R.1) of $990 billion are on the way. In fact, Idaho’s senior Senator Mark Crapo is the Chair of the Senate Finance Committee, which has jurisdiction over Medicaid and played a key role in getting these cuts through Congress. Shifting costs away from the federal government and to state budgets was an intentional aim of H.R. 1, and states are already reacting. Idaho is at least the second state to announce Medicaid provider rate cuts since H.R.1 was signed into law. North Carolina announced its plans to cut Medicaid provider rates by 3%, which the North Carolina Department of Health and Human Services directly attributed to these impending cuts.
Of course, Idaho’s health care providers face rising costs too, but only tribal providers, federally qualified health centers, and rural health centers are exempt from the reimbursement rate cuts. Idaho is a very rural state and is already suffering from acute provider shortages, as we discuss below.
The notice of reimbursement cuts come after a presentation from the Department on impacts to the state from H.R. 1, where the message was largely that Idaho was unaffected. This provider rate cut is also at odds with Senator Crapo’s repeated statements that HR1 targets “waste, fraud, and abuse” in Medicaid, including this post just days after Idaho announced these cuts. A 4% across the board cut to providers has nothing to do with targeting fraudulent activity. Our colleague Andy Schneider has debunked the claims that Medicaid cuts in HR1 are targeting waste, fraud, and abuse in a blog here.
What these cuts will do is exacerbate Idaho’s healthcare provider shortage, which plagues nearly every county in the state and is particularly acute in rural communities. Individuals living in rural communities, and particularly children and women of childbearing age, are more likely than those living in metro areas to rely on Medicaid for their health coverage.
Medicaid is a lifeline for kids and their families throughout Idaho, such as the Daniels family in Caldwell, Idaho. When Amber Daniels was 20 weeks pregnant with her youngest of four children, the baby tried to come early—too early for survival. With the help of Medicaid, the doctors were able to help Amber keep the baby in utero until he reached a viable gestational age of 32 weeks. Aleister had to spend the first month of his life in the NICU and Amber and her husband, Darrell, are grateful that Medicaid helped him survive. Amber remembers the days before she had Medicaid when she went without insurance because she couldn’t afford it. She had to either get her health care needs met or feed the family, and she always chose to feed the family. Now that she has Medicaid, she can ensure that she is in good health so that she can be there for her kids. She loves being a stay-at-home mom and because her husband has a job and the family qualifies for Medicaid, she can focus on being the best mom to her children.
My son is here today. If not for Medicaid, he wouldn’t be here. Medicaid saves lives.
— Amber Daniels, mother of four from Caldwell, Idaho
Idaho, along with just about every other state, has seen increased spending for its Medicaid program. But 97% of this growth is from the “traditional” Medicaid population, not the expansion group that continues to face attacks from the state legislature and was heavily targeted in H.R. 1. (The Idaho legislature has attempted to repeal Medicaid expansion year after year, with the latest failed attempt happening in the most recent legislative session.) Medicaid is the largest payor of long-term care services, which account for 23% of spending in the state. Individuals with disabilities and individuals 65+, while only making up 21% of Idaho’s Medicaid enrollment, account for half of Medicaid spending. These provider cuts will only hurt the “most vulnerable” individuals enrolled in Medicaid – the exact groups Senator Crapo and his colleagues who passed the cuts have promised to protect and serve.
Idaho may be one of the first states to announce these drastic cuts to their Medicaid program, but it certainly won’t be the last. As new, burdensome restrictions and requirements from H.R. 1 start to take effect, such as mandatory work reporting requirements, all states will have to reckon with the impact of H.R. 1 on their budgets in upcoming legislative sessions and for years to come.
Image Caption: Amber and Darrell Daniels with three of their four children. They live in Caldwell, Idaho. Darrell works for a pest control company while Amber enjoys being a stay-at-home mom to care for their children