The elephant in the room

COEUR d'ALENE - Idaho's Legislature has an opportunity to overhaul Medicaid and provide expanded coverage to an estimated 149,000 uninsured Idahoans even while cutting taxes, but some lawmakers don't think it will happen in 2014.

"We have a choice," said Corey Surber, from St. Alphonsus Health System in Boise. "We can redesign Medicaid at a substantial savings to taxpayers, or we can keep the status quo and continue to spend money on an inefficient system."

Surber was presenting the findings of Gov. Butch Otter's Medicaid Expansion Workgroup that was formed in July 2012. The Idaho Academy of Nutrition and Dietetics teamed up with Pilgrim's Market to hold a seminar on the subject Monday night.

Guest panelists included Sen. Dan Schmidt, D-Moscow, Kootenai County commissioner Jai Nelson and Legacy Health CEO Mike Baker.

Surber served as the facilitator of the governor's working group that was established in response to the Patient Protection and Affordable Care Act, otherwise known as Obamacare. Sen. Schmidt was a voting member of the workgroup, which unanimously recommended the expansion.

Surber explained that under the PPACA, states have the option to expand their Medicaid systems to allow low-income adults to participate in the program, and the federal government will increase the amount of money they give the states to offset the costs.

"We have 31,000 minimum wage workers in Idaho," she said. "We have the largest share in the country."

Minimum wage pays roughly $15,000 a year, she said. According to the U.S. Bureau of Labor and Statistics, a household of 2.6 people needs to earn $24,000 a year just to meet its basic needs.

Surber said the workgroup estimates that 149,000 adults could be enrolled in Medicaid if the state chooses to redesign the program, and 68 percent of those new enrollees are working full time. Another 16 percent hold at least one part-time job.

"These are the working poor," she said. "The expansion group is adults."

The recommended expansion would essentially end the county indigent program, which uses a property tax assessment to pay health-care costs of people who prove they cannot afford to pay for health procedures.

According to Nelson, the county pays the first $11,000 of a qualified claim, and the state picks up the rest. Surber said that amounts to about $60 million a year spent on indigent care statewide.

"The carrot in this is allowing states to shift the funding mechanism," she said, adding if the state expands Medicaid, the federal government will reimburse states 100 percent of the cost of the program for three years.

Currently, the federal government only reimburses 70 percent of the cost of Medicaid in Idaho.

After the three years, Surber said the federal Medicaid reimbursement will be ramped back to 90 percent, which is still better than the status quo.

Over 10 years, she said the working group found Idaho taxpayers would save $540 million in state taxes, $478 million in county taxes statewide and $110 million in mental health costs, while increasing the care in that area.

"This presents an opportunity for tax savings in the state," she said. "The heartburn is that the recommendation was putting more money into a system that wasn't functioning well."

That is why the workgroup recommendation came with a caveat: "The committee universally supports expanding Medicaid coverage to the working poor, but also unanimously believes there must be significant conditions attached to the proposition."

Those conditions include personal accountability, and a redesigned service delivery system. Surber said the group did just that by proposing a similar plan to the state of Indiana's Medicaid program.

That includes a health savings account, co-pays for doctor visits and a list of healthy behaviors that are financially incentivized. They have an 80 percent success rate in overall health improvement, she said.

Surber said the state has a conditional approval to do the same thing as Indiana if the legislature decides to take advantage of the expansion.

But even with all of the potential benefits, she said, she doesn't think the Legislature is going to address it in their upcoming 2014 session.

Sen. Schmidt agreed.

"I don't think there is the courage in the Idaho Legislature to bring it up," he said. "If it has to do with Obamacare, they don't want the stink on them."

Schmidt said headed into 2014, every Idaho legislator is up for re-election.

"For a lot of these legislators that is going to happen during the primaries in May," he said.

Baker said he prefers to remain more optimistic.

"There is a lot of concern," he said. "It's a lot of money and I get that, but we need to get something done.

"This is a phenomenal opportunity. Just because it is Obamacare, it is getting blown up into a big mess," he continued. "Our legislators need to express their dissatisfaction and if you lose your seat, you lose your seat."

Idaho State Rep. Ed Morse, who sits on the Health and Welfare Committee, didn't attend the seminar, but he has studied the issue extensively. He said on Tuesday the issues are a little more complex than simply political opposition to Obamacare.

"Certainly there is some of that going on," he said. "There is a seething hatred of this at the tea party level."

Aside from that, he said, the Legislature wants to make sure Idaho is able to maintain some control over the Medicaid program.

Primarily, Morse said, Idaho wants the authority to make the system more responsive - similar to what Indiana and a couple other states have been able to achieve.

"Something that isn't an open-ended entitlement program," he said, explaining that currently under Medicaid a smoker can get a lung transplant and isn't required to quit smoking.

"It's not cruel and hardness that is driving this," he said. "Certainly a strong financial case can be made if you can get the concessions. We are just evaluating the options."

Morse said he personally wants to go slowly into any expansion of a entitlement program to make sure Idaho interests are met.

"The risk and problem here is with the federal deficit," he said. "They may not have the resources to do all of this."

Morse said many worry that the 90 percent federal reimbursement rate could change if they find that they cannot afford to pay it.

"That is why we want to go slow," he said. "They are going to be running bigger deficits, but that doesn't matter to them. They have a printing press, but the states don't have that ability."

If the plan is expanded at the 90 percent reimbursement rate, Morse said it should be revenue neutral. But if that reimbursement rate is scaled back in the future, with all the new enrollees, the state would have no way to pay for it without substantially raising taxes.

"It probably won't happen this session," he said. "Not until we are confident we can get these concessions."