BOISE, ID - State agencies in Idaho that have already cut staff are having to cut again and do additional furloughs. That’s because the state of Idaho is $151 million short. Governor Butch Otter is expected to call for additional holdbacks in the coming months. But what if personnel costs make up only one percent of your department’s budget and you’ve cut most of the staff you can? Well, for Idaho’s Medicaid Program, that means cutting programs, programs that provide essential health care to thousands of Idahoans. Correspondent Samantha Wright reports.

Richard Armstrong: "I'm not feeling the love."

That’s Richard Armstrong, the Director of Idaho Health and Welfare. Armstrong is telling Legislators he’s going to have to cut Idaho’s Medicaid program by another $131 million. That’s on top of cuts the state has already made to hospitals, physicians, nursing homes, and prescription drugs.

Richard Armstrong: “Which by the way isn’t necessarily good health policy in fact some of this is rather bad health policy be we don’t have much choice in the matter, we have to have a balanced budget and therefore at some point we just simply have to say there has to be a change, a fundamental shift until we get out of this economic situation and some of those changes will be viewed as very unfavorable.”

That $131 million Armstrong is talking about includes a state budget holdback already ordered by the Governor. It also includes higher costs due to increased caseloads. And it includes more than $60 million the state will have to shoulder, once federal stimulus dollars run out.

So what else will be cut? Armstrong says he isn’t sure yet. Medicaid is a state and federal partnership. The federal government requires certain programs must be funded. But those that aren’t required, may be fair game when it comes to trimming the budget.

Richard Armstrong: “For example, there is no federal law that says we have to deliver pharmacy benefits to anyone.”

Armstrong says cutting Idaho’s drug program could save $130 million in the short term, but it’s a bad idea because it would lead to a rise in hospitalizations, and eventually cost more than it would save. But he says there are other basic programs, which might be cut.

Richard Armstrong: “It is a huge change that has to be made and it will not be easy. It will not be anything like what you’ve experienced the last couple years; these are not just small adjustments.”

These adjustments affect the lives of neighbors, parents, children and untold numbers of Idahoans just struggling to get by. Another change is that iff Idaho cuts $131 million in state funds, the federal government cuts it’s portion of matching dollars. That means a total loss to the state of $500 million, or almost one-third of the state’s total Medicaid program.

Richard Armstrong: “$500 million in impact on Idaho is, is just simply huge. To the economy and to all the providers that deliver the service, let alone the citizens who receive that service.”

But with every cut, comes another consequence. The cuts Armstrong is talking about could lead to job cuts in Idaho’s medical profession, leading to more unemployment, leading to more people signing up for Medicaid.

Richard Armstrong: “I don’t pretend that this will be a promotion of good public health policy, because it can’t, but it will be the best choices we can make, given the circumstance.”

Armstrong’s grim testimony was part of a presentation given to the Legislature’s Health Care Task Force. They met in Boise Tuesday for a one-day discussion regarding health care services in Idaho.

Copyright 2009 Boise State Public Radio

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