Nearing the last hurdle: What challenges remain for Medicaid expansion in Idaho?

May 28, 2019 GMT

The Affordable Care Act, commonly referred to as Obamacare, was passed in 2010 by the narrowest of margins in what was a tremendous partisan fight. For both good and bad, the ACA has had a major impact on Idaho’s businesses, especially Idaho’s health care and health insurance industries.

As originally passed, the ACA provided two pathways to provide health insurance for low-income individuals and families who did not have health coverage through an employer. One of those pathways to insuring more people was the ACA’s expansion of state Medicaid programs to provide health care coverage to those individuals and families who make less than 138 percent of the federal poverty level ($35,535 for a family of four). For states that expanded their Medicaid programs, the ACA required the federal government to pay 90 percent of the long-term costs associated with that expansion, with states paying 10 percent of those costs. A 2013 U.S. Supreme Court case upheld a challenge to the ACA, but made Medicaid expansion optional. As a result, the court’s decision left it to each state to decide whether it would participate in the ACA’s expanded Medicaid program.


From 2013 through 2018, Idaho’s Legislature repeatedly declined to expand Idaho’s Medicaid program to provide basic health coverage for the somewhere between 51,000 and 62,000 residents of Idaho who live below 138 percent of the federal poverty level and do not have health care coverage.

After five years of failing to convince the Idaho Legislature to expand Medicaid, advocates for Medicaid expansion turned to the ballot initiative process to accomplish this task. Those advocating for Medicaid expansion included representatives and members of Idaho’s working poor, health care providers and many in the business community who believe that uncompensated health care costs are passed on to businesses through increased insurance premiums.

After a sometimes heated campaign, the Medicaid expansion initiative overwhelmingly passed with over 60 percent of the vote in November’s general election. By the direct vote of the people, Idaho Code § 56-267 was created and expanded Medicaid to include individuals and families who make less than 138 percent of the federal poverty level. Still, hurdles remained.

On Nov. 21, 2018, Brent Regan filed a petition with the Idaho Supreme Court asking the Court to declare that Section 56-267 was unconstitutional. After allowing two individuals who would be eligible for services under expanded Medicaid, a physician who treats poor patients, and the Idaho Medical Association to join the case, on Feb. 5, the Idaho Supreme Court dismissed the petition and refused to find Medicaid expansion unconstitutional.


With the framework for Medicaid expansion in place and the legal issues resolved, it remained up to the Legislature to appropriate the funding necessary for that expansion. Again, many in the Legislature renewed their opposition to Medicaid expansion and sought to limit its implementation. Finally, after a long and rancorous debate, an amended version of Senate Bill 1204 was passed by both houses of the Legislature and signed by Gov. Brad Little.

SB1204 amended Idaho’s Medicaid law to require that able-bodied recipients of the expanded Medicaid program spend at least 20 hours per week either working, participating in work training programs, attending school or volunteering, as verified twice yearly by the Department of Health and Welfare. The intent of these “work requirements” was to enable coverage while promoting the participants’ health and financial independence.

SB1204 also provided that in the event that a Medicaid participant fails to comply with these work requirements the recipient will either lose Medicaid eligibility or be subject to the maximum allowable copayments for covered Medicaid services for a period of six months or until the person complies with the work requirements, whichever is earlier. Idaho’s Department of Health and Welfare is in the process of seeking a waiver from the U.S. Department Health and Human Services to allow the implementation of SB1204’s work requirements.

Other states have successfully obtained a waiver from HHS approving work requirements for their state’s expanded Medicaid program. However, advocates have filed lawsuits challenging the approval of those work requirements for the newly eligible recipients of Medicaid expansion. In both cases, those legal challenges have been successful. Courts have reasoned that these HHS-approved work requirements have the effect of limiting access to Medicaid by those who need medical care and cannot afford it — something that is inconsistent with the Medicaid program itself.

It seems likely that HHS will approve Idaho’s application for a waiver to implement SB1204’s work requirements. It remains to be seen whether a legal challenge will ensue and whether the legal challenge will be successful. It also remains to be seen whether the Legislature will fund Medicaid expansion on a yearly basis going forward, an expenditure that could exceed $40 million per year.

Why should Idaho’s businesses care about Medicaid expansion? Each year at renewal time, Idaho’s businesses face the ever-increasing costs of providing health insurance for their employees. A portion of each health insurance premium reflects the costs associated with health care provided to Idaho residents who have no insurance. Idaho’s health care providers write off millions of dollars of uncompensated care each year for services provided to patients with no insurance. According to the Kaiser Family Foundation, studies show that health insurance premiums are lower in states that have expanded Medicaid and that expansion has reduced the costs incurred by providers for uncompensated care. In fact, one study suggested that Medicaid expansion resulted in a 41 percent savings in uncompensated care by hospitals in expansion states. The very real costs of uncompensated care are passed on to the health insurance companies who have no choice but to pass these costs on to their customers. Reducing that amount benefits everyone.

Medicaid expansion will also help those uninsured individuals who delay receiving health care until their condition becomes acute. What could have been managed through blood pressure and cholesterol medication is now a serious heart condition requiring surgery. Cancer that would have been diagnosed in a routine office visit instead will be diagnosed at an advanced stage.

These uninsured individuals often resort to receiving care at the emergency room of their local hospital, where the cost of care is the highest and where they will not be turned away based on their inability to pay. The high cost of emergency care, coupled with the more extensive care that is often needed, leads to hospital and physician bills that are simply unaffordable to those without insurance. To stay in business, these same hospitals and physicians seek additional higher reimbursement rates from private insurance companies who provide coverage to your company and your employees. This is an unsustainable cycle.

While it certainly appears that Medicaid expansion will soon be a reality in Idaho, some uncertainty remains.

Tom Mortell is a partner at Hawley Troxell and chairs the firm’s health law practice group. He represents hospitals and other health care providers throughout Idaho. He is also a member of the firm’s governing board. He can be reached at tmortell@hawleytroxell.com.