Idaho: State throws caution & sanity to the wind, passes/signs Medicaid expansion bill chock full of likely illegal stuff after all

A week or so ago there was an important ruling by a federal judge which shot down Medicaid expansion work requirements in two states (Arkansas and Kentucky) while also having a ripple effect in two more (Idaho and Iowa):

The [Idaho] Senate Health and Welfare Committee voted 7-2 to hold in committee a House bill that would create a work requirement for Medicaid expansion beneficiaries — after lawmakers found out during the hearing that a federal judge had just struck down Medicaid work requirements in Kentucky and Arkansas.

Meanwhile, a Senate bill that would create a voluntary job training requirement for Medicaid expansion beneficiaries is still in that chamber’s amending order and could come up soon. The Medicaid budget for 2019-2020 is still being held in the full House. And Gov. Brad Little has said he won’t let lawmakers adjourn for the year until Medicaid expansion and funding is resolved.

That was the good news...especially given that Idaho voters had made it clear last fall that they wanted full Medicaid expansion to 138% of the federal poverty line (instead of the 100% FPL cut-off the GOP was seeking) without work requirements or other junk cluttering things up anyway.

Well, here's what just happened instead:

Idaho has approved Medicaid expansion for an estimated 90,000 low-income residents.

Republican Gov. Brad Little on Tuesday signed into law a bill expanding Medicaid to people earning up to 138%of the federal poverty level.

OK, that's the good news...the full 138%, right? Unfortunately, it sounds like the Idaho GOP had a change of heart and decided to just say "screw it" to the judge after all:

The compromise bill that emerged from the House and Senate seeks a federal waiver for a work requirement that would kick people off Medicaid for failing to meet those requirements.

The bill would also seek a waiver to allow those in the expansion to stay on the state's health insurance exchange rather than go on Medicaid, a move backers say could save the state millions of dollars

Voters authorized Medicaid expansion in an initiative in November with 61% of the vote after years of inaction by the Legislature. The initiative didn't include work requirements.

Wait...what?? It is seeking work requirements after all...and also it would...huh?? Doesn't that amount to limiting it to 100% FPL after all?

According to the Idaho Statesman, I'm not the only one confused about this:

During a House Health and Welfare Committee hearing on Medicaid expansion last week, Boise resident Dena Duncan listed a few of the controversial ideas the Idaho Legislature had put forward. Work requirements, patient copays and more.

“Are these things even legal?” she asked.

Idaho’s Medicaid expansion bill, with several sideboards such as work requirements, was signed by Gov. Brad Little on Tuesday. Lawyers told the Statesman that it might contain illegal provisions.

...Various bills ping-ponged back and forth between the House and Senate, as lawmakers came up with new ideas on the fly. They gave conflicting statements on whether they meant to leave out a job-training program they had said was important. Nobody seemed to agree on how much the various proposals would cost the state.

...The bill would put Medicaid expansion into a more closely managed system, kind of like an HMO. Patients would have a “medical home,” such as a primary care clinic.

...Also, it might run afoul of federal law, she said.

...Another piece of the bill would put people on private health insurance, through the Your Health Idaho exchange, by default. If someone wanted Medicaid coverage instead, they could opt in. The carve-out would apply only to people with incomes between 100% and 138% of poverty level — $12,490 to $17,236 for a single person.

As Dave Anderson and others have pointed out, this would make for some very messed-up risk pool scenarios:

As @bjdickmayhew notes, this could cause all sorts of adverse selection issues, depending on provider networks, out-of-pocket exposure, etc.

Some of it would depend on the waiver specifics... Would people be able to switch back and forth anytime, or be locked in for a year?

— Louise Norris (@LouiseNorris) April 10, 2019

So would sick peeps want Medicaid, for low costs, or marketplace, for possibly but not necessarily better networks?

— xpostfactoid (@xpostfactoid) April 10, 2019

I have no idea what direction the selection would run to --- I think it would be very county specific given premium spreads and networks --- it would just be weird

— David Anderson (@bjdickmayhew) April 11, 2019

Of course, the Idaho legislature could have avoided all this confusion and fuss if they had just...you know...followed the will of the voters and implemented straight, full Medicaid expansion...but apparently that made too much sense...