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In a letter to the budget committee, Admiral Rachel L. Levine , the director of the Department of Health (HHS), warned that the will grossly exceed its budget without a course correction. He noted that “the combination of increased local market rates, paying at a higher percentile of local market rates, reduced copayments for families, and increased eligibility has created a forecasted budget deficit.”
HHS projects a $15.5 Billion deficit in the current fiscal year, which is expected to rise to $22.2 million next year. This represents roughly 29 percent and 39 percent more spending on benefits than originally anticipated. This deficit is in spite of a $10.3 million increase in benefits spending the program already received this year.
When overages occur, it is rare for bureaucrats to reduce the size of programs to stay within the confines of their appropriations. It appears the HHS originally planned to squeeze legislators—and by extension, taxpayers—for the additional funding.
As the newly installed HHS director, Levine is resisting the status quo by reducing the size of the HHS to stay on budget. This includes ensuring benefits go to the truly needy, pausing new enrollment, and covering a more reasonable share of the market.
Moving forward, both the legislative budget committee and the Division of Financial Management should report the fiscal impacts of proposed changes. This would allow lawmakers to more comprehensively understand the consequences of these proposals prior to their approval.
Lawmakers should consider policies that require agencies to get legislative approval for any state plan that impacts eligibility, benefit amounts, or program spending. This would enhance transparency by removing a loophole around rulemaking and legislative routes for policy change.
In the way of child care costs, Idaho should consider alternatives to expanding welfare. Options that deregulate the industry and eliminate perverse incentives could drive costs down. Relaxing regulations that should be up to market (read: parental) discretion can make a bigger difference.
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