Follow the Money: JFAC, Provider Rates and the Budget Fights

Most arguments about Medicaid in Idaho end up as arguments about money, and most of those arguments mix two or three different numbers without saying so. A legislator says the program costs $5.5 billion. An advocate says the Legislature cut it by $45 million. A provider says her rate fell 10 percent. All three statements can be accurate, because each describes a different slice of the budget. This lesson gives you the vocabulary to separate the slices and the paper trail to check them.

Four kinds of dollars

An Idaho appropriation names the fund each dollar comes from. For Medicaid, four funds matter.

• General fund. The state's main checking account, filled mostly by income and sales taxes. When lawmakers talk about the budget being tight, they mean this fund. Medicaid's general fund line appears in the budget documents as the Cooperative Welfare (General) Fund.
• Federal funds. The federal government's share, paid through the federal medical assistance percentage (FMAP) described below. These dollars show up as the Cooperative Welfare (Federal) Fund.
• Dedicated funds. Money earmarked by law for a purpose. Examples in the Medicaid budget include the Cooperative Welfare (Dedicated) Fund, the Medicaid Management Information Systems Dedicated Fund, the Idaho Millennium Income Fund and the Hospital Assessment Fund. Some of these dollars come from fees or rebates and never pass through the tax system.
• Total funds. All of the above added together. When a headline gives one Medicaid number without a qualifier, it is probably total funds, and that number is the largest.

The fiscal note on Senate Bill 1433 gives the FY2027 split for the Division of Medicaid.

Fund type	FY2027 amount	Share of total
General fund	$1,047,899,300	19.1 percent
Dedicated funds	$1,257,074,200	22.9 percent
Federal funds	$3,172,592,900	57.9 percent
Total	$5,477,566,400	100 percent

The general fund share is the number lawmakers fight over, because it is the part they must raise from taxes each year. It is also the smallest of the three. A claim such as "Medicaid is eating the state budget" can be tested only against the general fund line. A claim such as "Medicaid is mostly paid by Washington" needs the federal line and the match rate, and the arithmetic below shows why the two claims coexist.

The federal match: FMAP

The federal medical assistance percentage sets the federal share of most Medicaid spending in a state. The Social Security Act gives richer states a lower rate and poorer states a higher one, with a floor of 50 percent. KFF publishes the rates by state. For Idaho, KFF lists 67.59 percent for federal fiscal year 2025, 66.91 percent for 2026 and 67.31 percent for 2027. The nationwide range for 2027 runs from 50 percent to 77.32 percent, with Mississippi highest. For expansion adults, Section 1905(y) of the Social Security Act sets the federal share at 90 percent. Idaho Code 56-267 refers to that 90 percent commitment and builds triggers around it.

Two calendars that do not line up

The federal fiscal year runs October 1 to September 30. Idaho's runs July 1 to June 30. Senate Bill 1435 defines fiscal year 2027 as July 1, 2026 through June 30, 2027. The FMAP changes on October 1, so the state fiscal year is split. If spending is spread evenly, the first three months (July to September 2026) fall under the federal fiscal year 2026 rate of 66.91 percent and the remaining nine months fall under 67.31 percent. A month-weighted average works out to (3 x 66.91 + 9 x 67.31) / 12 = 67.21 percent. That figure is my arithmetic for illustration and assumes even monthly spending. Real budget documents use the rate the department forecasts.

The calendar: how a budget gets set

Idaho Code 67-3502 and the Legislative Services Office (LSO) and Division of Financial Management (DFM) budget pages describe the yearly cycle. Read it as a sequence you can follow in documents.

When	What happens	Where to see it
By July 15	DFM makes budget request forms available to agencies	Idaho Code 67-3502(1); DFM Budget Development Manual
By September 1	Agencies file requests with DFM and LSO; the date can be waived by agreement of the two directors	Idaho Code 67-3502(2); agency budget request pages
September to December	DFM analysts brief the governor, who finalizes the executive recommendation	DFM budget process page; LSO process page
Early January	The governor presents the recommendation on the first day of the session; the Legislative Budget Book from LSO is JFAC's main reference	Governor's budget highlights; Legislative Budget Book
January to March	JFAC hears agency presentations, adopts a revenue forecast, votes the maintenance budgets, then considers enhancements line by line in working groups and votes motions	JFAC minutes at legislature.idaho.gov
February to April	Passed motions become appropriation bills; both chambers vote; the governor signs or vetoes (including line items)	Bill pages for the S14xx series in 2026
July 1	The new fiscal year begins	The act itself states the dates

Notice that the process starts a year before the money is spent. The agencies were filing fiscal year 2028 requests by September 1, 2026, while the fiscal year 2027 budget was only in its third month. A legislator who learns of a Medicaid problem in March can fix next year's budget and, through a supplemental, part of this year's. The comment and testimony windows are earlier than most people think.

What JFAC does

The Joint Finance-Appropriations Committee has 20 members, 10 from the House and 10 from the Senate (Idaho Capital Sun, November 2025). It sets the budget for every state agency, which is why a Medicaid rate fight is decided there as much as in a policy committee. The Capital Sun's 2026 legislative guidebook describes the sequence: JFAC adopts a revenue forecast, votes on about ten maintenance omnibus budgets that fund existing spending, then works through new spending requests (enhancements) in work groups and votes on motions. Once JFAC votes, staff draft appropriation bills, which go to the floors of both chambers.

Voting rules

JFAC counts votes by chamber. Under the rules in force in 2025, a budget needed six yes votes from each chamber even when some members were absent. In November 2025 the co-chairs issued a letter changing the interim procedure: a budget now needs a majority of the members present from each chamber, so with seven present from each side, four yes votes from each chamber pass it. A budget that lacks a majority in either chamber fails, though it can be rewritten and brought back. The letter was an interim arrangement until the Legislature adopts formal joint rules, and the committee did not vote on it. Verify the current rule at the start of a session.

The governor proposes but cannot set the budget. The governor can veto a whole budget bill or use a line-item veto. Capital Sun reporting says Gov. Brad Little has used the line-item veto once, on a section of his own office's budget.

Maintenance versus enhancement

These two words explain most Medicaid budget stories.

• Maintenance funds the agency at its base, adjusted for known cost changes. Senate Bill 1435 is a maintenance bill. It appropriates $4,984,211,600 for the Division of Medicaid, including the cut from House Bill 863.
• Enhancements are changes to that base, and they can be increases or decreases. Senate Bill 1433 adds $493,354,800 on top of the maintenance amount. The fiscal note says $127,722,500 of that is one-time and $365,632,300 is ongoing. The largest piece is $387,122,100 for population forecast adjustments.

Adding the two bills: $4,984,211,600 + $493,354,800 = $5,477,566,400. That is the number in Figure 1.

Reading the FY2027 appropriation

The Division of Medicaid appropriation is spread across programs that mirror the plans a person is enrolled in. Add the lines in the two bills and you get this.

Program line	Maintenance (S1435)	Net enhancement (S1433)	FY2027 total
Medicaid administration and medical management	$119.4 million	+$106.7 million	$226.1 million
Coordinated Medicaid Plan	$1,283.2 million	-$142.1 million	$1,141.1 million
Enhanced Medicaid Plan	$1,355.4 million	+$85.7 million	$1,441.1 million
Basic Medicaid Plan	$901.9 million	-$27.2 million	$874.6 million
Expansion Medicaid Plan	$1,321.0 million	-$131.5 million	$1,189.5 million
Hospital assessment line	$0	+$601.8 million	$601.8 million
Extended employment services	$3.4 million	$0	$3.4 million
Total	$4,984.2 million	+$493.4 million	$5,477.6 million

Three cautions come with this table.

First, the plan-level decreases are not cuts to people. Enhancement 22 in the fiscal note realigns the Hospital Assessment Fund and creates a new budgeted program to track supplemental payments. Section 2 of Senate Bill 1433 removes hospital assessment money from the four plan lines (about $248.1 million combined), and Section 1 puts $601.8 million into a separate hospital assessment line. A reporter who compares last year's Expansion Plan line with this year's, without reading the fiscal note, would see a drop that is mostly an accounting move. The fiscal note says the realignment follows House Bill 345 of 2025.

Second, the Expansion Plan line is not 90 percent federal. In Senate Bill 1435 the line shows $1,010,215,500 in federal funds out of $1,320,999,400, which is 76.5 percent. After Senate Bill 1433 adjustments, my arithmetic gives $869.9 million federal out of $1,189.5 million, or 73.1 percent. The 90 percent match applies to expansion adults' covered services, and the appropriation line may contain costs outside that match. I could not determine from the bills why the line is below 90 percent, so treat any story that says the expansion line is "90 percent federal" as unconfirmed until someone asks LSO or DHW for the breakdown.

Third, the fiscal note is a proponent's document. Each page carries a disclaimer that the statement of purpose and fiscal note are attachments prepared by a proponent of the bill, are not an expression of legislative intent and are not meant for use outside the legislative process (Joint Rule 18). Use it for the numbers it reports and not for the claims about what those numbers prove.

The 2025 and 2026 budget fights, step by step

August and September 2025: holdback, rate cuts and a supplemental

In August 2025, Gov. Little ordered a 3 percent mid-year cut for state agencies other than public schools, tied to a projected shortfall of about $80 million. DHW announced a 4 percent cut to Medicaid reimbursement rates for all provider types and services. This was a department action. House Bill 345 did not require it. DHW expected the rate cut to save about $30 million in FY2026 and, per the governor's FY2027 budget highlights, $23 million in general fund in FY2027.

On September 12, 2025, the Idaho Capital Sun reported that DHW needed $60 million more for Medicaid in FY2026, a supplemental request. The department tied part of the gap to about $22 million in general fund that was meant for FY2025 but was released in FY2026 because of a problem in the state's Luma business system. Juliet Charron, then the Medicaid deputy director and soon to become the department's director, attributed most cost growth to the traditional Medicaid population (children, pregnant women and people with disabilities) and not to expansion. The same report put DHW's FY2027 request for the whole department at $6.23 billion.

The fiscal note on Senate Bill 1433 shows how the year looked after the Legislature acted. The original FY2026 Division of Medicaid appropriation was $5,249,797,100, with $994,049,300 in general fund. A forecast adjustment added $107,244,000 in total ($92,592,400 general fund). The 3 percent rescission took back $17,483,900 in general fund ($61,834,900 total in the table line). Net, the FY2026 total became $5,295,118,600 and the general fund share $1,069,070,200, which is $75,020,900 above the original general fund amount. A supplemental is a mid-year correction. It does not mean the department mismanaged money, though it does show the original forecast missed.

January 2026: the governor's recommendation

Gov. Little's FY2027 budget recommended a $45 million general fund reduction in Medicaid. The governor's highlights break it into the 4 percent provider rate adjustment, which yields $23 million in general fund savings in FY2027, and an additional $22 million in service reductions. Capital Sun reporting in January described an options list that included rate reductions for hospitals, residential habilitation and managed care administration, and removal of services such as adult dental, some home and community-based services, adult pharmacy for non-expansion adults and others. The governor did not recommend repealing expansion. The state projected a shortfall of about $40 million in the current fiscal year and more than $500 million for the next, according to the same article, which is the background for every number that follows.

March 6, 2026: JFAC sets the number

On Friday, March 6, JFAC set the Medicaid budget at about $5.54 billion in total funds, a few million dollars above the governor's recommendation, with about $493 million in enhancements. Rep. Chris Bruce (R-Kuna) made the motion that carried: set the budget without planning for the cuts. Two motions to plan cuts failed. Sen. Kevin Cook (R-Idaho Falls) proposed splitting the $22 million between residential habilitation and Medicaid claims payments. Sen. Melissa Wintrow (D-Boise) proposed cutting $22 million from the claims estimate with no service cuts, which she described as about four and a half days of Medicaid receipts. Only she and Sen. Janie Ward-Engelking supported hers.

The tally matters less than the sequence. JFAC adopted the high number and then left the cut for a separate bill. That is how a legislature can end up with both a full-budget vote and a cut within weeks, because the policy bill goes through a policy committee and the appropriation goes through JFAC.

March 2026: House Bill 863 and the budget bills

House Bill 863 passed the House 60 to 8 (2 absent or not voting) on March 12 and the Senate 19 to 15 (1 absent or not voting) on March 23. Gov. Little signed it Thursday, March 26, 2026, session law chapter 161. The statement of purpose attributes a $21.8 million reduction to the residential habilitation rate change in FY2027 and calls for $1.7 million, split evenly between general and federal funds ($850,000 each), for an independent auditor of home and community-based services. It says Medicaid pays more than $176.5 million in general fund for residential habilitation and other home and community-based services. The bill reduces rate increases the Legislature approved in 2022. According to the bill's fiscal note as reported by the Capital Sun, those increases were meant to go with a new budget tool, and a court order in the K.W. v. Armstrong lawsuit blocked that tool. Combined with the 2025 rate cut, Capital Sun reported that the reductions amount to about a 10 percent cut for residential habilitation providers, and the lawmakers behind the bill say rates remain about 33 percent above four years ago. Both are claims to attribute, as the second one comes from the bill's supporters.

Nine Republicans and six Democrats voted no in the Senate. Ritchie Eppink, the lead lawyer in K.W. v. Armstrong, warned of more litigation. Sen. Julie VanOrden (R-Pingree), a cosponsor, argued providers might take less money and still pay caregivers adequately. Capital Sun reported that the cut takes effect July 1, 2026, the start of FY2027. The bill page lists sections 1 and 2 as effective March 26, 2026 and section 3 as effective July 1, 2026.

Senate Bill 1433 passed the Senate 20 to 15 on March 30 and the House 35 to 32 (3 absent or not voting) on March 31. Gov. Little signed it April 2, 2026 as session law chapter 285. Senate Bill 1435, the health and human services maintenance bill, passed the Senate 22 to 13 on March 26 and the House 43 to 25 (2 absent or not voting) on March 30, and was also signed April 2 (chapter 271). Count the margins. A 35 to 32 House vote on the bill that sets Medicaid's enhancements shows how close the chamber was, even in a year when lawmakers largely spared Medicaid from the broader cuts. JFAC exempted Medicaid from additional 1 to 2 percent across-the-board cuts it applied to other agencies, according to Capital Sun.

Provider rates: where budget lines meet people

A provider rate is the price Medicaid pays for a unit of service. Providers are paid per visit, per day, per hour or per procedure, and the state sets the rates through its plan and rules. A rate cut passes through to employees because staff wages are most of a provider's cost.

Each rate decision has an opposing worry. Lawmakers who favor cuts say the state cannot afford the growth, and they note rates remain higher than four years ago. Providers testified that cuts could force some of them to close, including Jodi New of Teton Supported Living, who told the Capital Sun in April 2026 that the 4 percent rate cut caused her to close her work office. People receiving services say waiting lists and missed care are the cost. Evidence on access after a rate cut is thin in the sources used for this lesson, so none of those claims is settled here. What can be settled is which dollars changed, in what bill, and on what date.

Rate cuts and access

A related episode shows how budget decisions reach patients. After four patients died within three months of a Medicaid contractor cutting a mobile treatment program, the Legislature and governor restored funding for the Assertive Community Treatment program and for peer support services, the Capital Sun reported on April 9, 2026. Providers told the paper that only one patient had died in the 18 months before the cut. Those are claims by named sources and the article gave no dollar amounts. A reporter writing this up would ask the Idaho Department of Health and Welfare for the contract cut date, the restoration date and the amount.

Reading a budget number: a checklist

An example of a misleading per-person number

Divide $5,477,566,400 by 260,000 enrollees and you get about $21,068 per person. The number sounds like a price tag per enrollee, and it is wrong for three reasons. The $601.8 million hospital assessment line and $226.1 million of administration are not per-person medical costs, and removing them leaves about $4,649.7 million. The remaining amount covers very different groups: a child on the Basic Plan costs far less than an adult in a residential facility on the Enhanced Plan. And the enrollment denominator is itself uncertain: the Capital Sun reported about 260,000 total in June 2025, and expansion enrollment ranges from 79,000 to 92,000 in different sources and dates. For a fair per-person figure, use DHW's cost-per-eligible reports by population. The Data and Statistics lesson on numbers that matter covers per-capita traps in general.

Claims worth testing

Several numbers from the 2026 session came from interested speakers. Treat them as claims to test.

Claim and source	What to check
Sen. Melissa Wintrow: about $453 million in revenue lost to 2025 tax cuts led to budget reductions (Capital Sun, April 9, 2026)	Fiscal notes on the 2025 tax bills; LSO revenue reports
Hillarie Matlock, Idaho Voices for Children: Medicaid was cut $45 million while $239 million went unspent (Capital Sun, April 9, 2026)	What the $239 million is: a general fund balance, a reversion, or a different category; and whether $45 million is the proposal or the outcome
Lawmakers behind House Bill 863: residential habilitation rates remain 33 percent above four years ago	The rate schedules for the base year and the current year; the pay-rate history for 2022
DHW: most cost growth is in the traditional population, not expansion (Charron, Sept. 2025)	DHW expenditure reports by population, with the same fund definition each year

Where to read the primary documents

The Idaho Legislature posts nearly everything. A short path:

• The bill page for any appropriation (for example, S1433 or S1435) lists sponsor, votes, governor action and session law chapter. The text and the statement of purpose and fiscal note are linked from the page.
• The Legislative Budget Book and the JFAC minutes and attachments are on legislature.idaho.gov. The 2026 minutes include the Division of Medicaid base review presented to JFAC on January 22, 2026.
• The Division of Financial Management posts executive budget documents and performance reports at dfm.idaho.gov.
• DHW posts monthly budget transparency reports for the Divisions of Medicaid and Self-Reliance on its reports and statistics page.
• Senate Bill 1435 itself requires monthly reports comparing Medicaid appropriations with actual and forecast spending (Section 8) and a managed care progress report by December 1, 2026 (Section 10). Those are public documents to request if DHW has not posted them. See Public Records Requests, lesson 3.

County commissioners also have a stake: indigent medical costs sit in a county budget, and Medicaid changes shift the load. The Elected Officials guide on budgets and fiscal duty and the Local Government course cover county budgets. This lesson does not estimate county savings, because the sources I used did not publish one.

What comes next in the budget cycle

By the time you read this, the next appropriation cycle has already started. Agencies filed their FY2028 requests by September 1, 2026. The governor will present a recommendation at the start of the 2027 session. JFAC will hear from DHW and adopt a revenue forecast before it sets Medicaid. Two items outside the department's control will weigh on the numbers: the work requirement starting January 1, 2027, which could change enrollment and therefore spending, and the managed care progress report that Senate Bill 1435 requires by December 1, 2026. Lesson 6 explains the first and lesson 7 the second.

For a public comment, the best time is before the governor's number is final and before JFAC votes. The Testifying course lesson on Idaho legislative committees explains how to find the agenda, and lesson 4 explains written testimony. A specific request with a bill number and a dollar figure will be heard better than a general plea. Pull the S1433 fiscal note, find one line you can explain, and write down the question you would ask about it.