Repeal or reform: The Idaho Legislature’s plans for Medicaid expansion in 2025

For years, Idaho Republican lawmakers have said the rising budget for Idaho’s largest government program, Medicaid, needs to be controlled.

Some think 2025 may finally be the year for big changes in Idaho Medicaid expansion, which made more lower income earners eligible for the health insurance assistance program.

Idaho voters widely approved the policy in 2018. But many Republican lawmakers say expansion is a key driver behind Medicaid’s budget growth.

Lawmakers expect several bills on Medicaid expansion — ranging from flat-out repeal bills to proposals that would require reform as a condition of expansion to continue — to be introduced in the 2025 legislative session, which starts Jan. 6.

In the past, those types of bills haven’t advanced far in the Legislature. But significant turnover in the House Health and Welfare Committee — combined with Republicans securing control of the White House and both chambers of the U.S. Congress — may pave a path forward for the bills next year.

“Medicaid expansion will very unlikely look the same as it has in years past,” Rep. Jordan Redman, R-Coeur d’Alene, told the Idaho Capital Sun in an interview.

To Redman, the question is: Is adding sideboards, such as work requirements, to make the program more efficient and accountable the way, “or is a full repeal the only option that we have?”

“In my meetings with multiple folks in health care, I think they like the thought of having sideboards,” he continued. “And not everyone does, right? … But I know that the current makeup, at least in the House, knows that we need to make some corrections to Medicaid expansion.”

What is Medicaid expansion in Idaho?

Under the Affordable Care Act passed in 2010, the federal government incentivized states to expand Medicaid to a broader range of low-income earners by offering to cover Medicaid expansion policies at a higher federal matching rate of 90%.

Idaho was one of several holdout states that didn’t expand Medicaid.

Idaho Republican lawmakers have long worried states would be left to pay higher costs for expansion if the federal government reduced its extra pay.

But in not expanding Medicaid, tens of thousands of Idahoans were left in a medical insurance assistance coverage gap, dubbed the Medicaid gap. People in the gap earned too much to qualify for Medicaid, but too much to qualify for tax subsidies on Idaho’s health insurance marketplace, Your Health Idaho.

To qualify for subsidies on the exchange, people need to earn at least 138% of the federal poverty level. To qualify for Medicaid before expansion, people could earn up to 100% of the federal poverty level. Medicaid expansion raised that income cap to 138%, closing the gap

In 2018, after years of stalled legislative efforts to address the Medicaid gap, nearly 61% of Idaho voters approved a ballot initiative to expand Medicaid.

Since then, support for expansion has risen, public polling from 2023 shows.

But that doesn’t mean the will of the public “will prevail,” Idaho House Minority Leader Ilana Rubel, D-Boise, told the Sun in an interview.

“I’m concerned that the Republican politicians in there might be more concerned with catering to an extremist fringe, than they are to catering to the clearly expressed wish of the majority of Idahoans,” she said.

Why Idaho Republicans worry about Medicaid’s budget

Idaho Medicaid expansion took effect in 2020. Many Republican Idaho lawmakers say Medicaid expansion has been much more expensive than initially expected, and is straining the state’s budget.

“Budget wise, it was sold to the public that it’s going to cost $400 million, and it’s at $1.1 billion right now,” Idaho House Health and Welfare Committee chairman John Vander Woude, R-Nampa, told the Sun in an interview. “… We’re going to try to have to rein some of that in. Because even even 10% of that is $110 million to the state”

In 2019, before Medicaid expansion, Idaho Medicaid’s total budget was almost $2.5 billion, including $1.6 billion in federal dollars and about $880 million in state dollars. For next fiscal year, which starts in July 2025, the Idaho Department of Health and Welfare requested $5.3 billion — including $3.5 billion in federal funds and $1.8 billion in state funds.

Some health policy advocates say a closer look at the state budget shows Medicaid has actually had steady budget growth and Idaho’s expansion has saved state spending in other areas, like for the state’s prison system, mental health services, the courts and state financial aid services for indigent health care.

And expansion has saved lives, advocates say.

“Idaho voters know what they voted for. They were voting to close the health coverage gap for their families, for their neighbors who didn’t have any other option and would be uninsured without it,” Hillarie Hagen, senior policy associate at Idaho Voices for Children, told the Sun in an interview.

House Speaker Mike Moyle, R-Star, said if the Medicaid budget isn’t controlled, it could mean less funds for other areas — like education and tax relief. And he says the rising Medicaid budget isn’t just affecting Idaho.

If the federal government cut its extra Medicaid expansion funding, over three million adults could immediately lose their health care coverage because of Medicaid-expansion repeal trigger laws in nine states, KFF Health News reported.

Idaho isn’t among those states. But Idaho is one of three states that has a law that would require mitigating financial impacts of losing Medicaid expansion funds, the health news outlet reported.

And since potential congressional federal funding cuts to Medicaid expansion would leave state legislatures to cover more costs, policies in all states would be at risk.