Did the Idaho AG flag legal problems with the 2017 Reclaim Idaho Medicaid expansion initiative that became Proposition 2 in 2018?

Subject

The Idaho AG's advisory Certificate of Review under Idaho Code § 34-1809 of the Reclaim Idaho-affiliated October 2017 citizen initiative that proposed to add a new section to Idaho Code chapter 56-2 (Public Assistance Law) mandating expansion of Medicaid eligibility to all individuals under age 65 with modified adjusted gross income at or below 133% of the federal poverty level. The initiative would later qualify for the November 2018 ballot as Proposition 2 and pass with about 60% of the vote.

Currency note

This opinion was issued in 2017 (and posted in 2018). Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. In particular, Idaho voters did approve the initiative as Proposition 2 in November 2018; the Idaho Supreme Court later upheld it against constitutional challenge in Regan v. Denney, 165 Idaho 15 (2019). Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Plain-English summary

In October 2017, an organizer affiliated with Reclaim Idaho filed an initiative petition to expand Medicaid eligibility in Idaho. AG Lawrence Wasden's Certificate of Review under Idaho Code § 34-1809 was issued November 7, 2017 (the daily-agent landing-page captures it as 2018-04-26 because that is when it was posted online).

The initiative had four short sections:

Section 1. New Idaho Code § 56-267, mandating Medicaid eligibility for individuals under age 65 with modified adjusted gross income at or below 133% of the federal poverty level (excluding those already eligible). This tracks the Affordable Care Act's expansion population, which qualifies for the 90/10 federal/state match rate.

Section 2. Amends existing Idaho Code § 56-262 to extend the chapter's definitions to the new § 56-267.

Section 3. Emergency clause making the act effective on passage.

Section 4. A contingent sunset: the expansion would become null and void if the federal share dropped below 90%.

AG Wasden's review identified four categories of issues, all of them on the formal/procedural side rather than the substance:

Drafting form. Section 1's new code section did not need underlining (because it was new, not amending). Section 2 lacked the strike-through/underline conventions for showing changes to an existing statute. The enactment clause was framed for legislative process ("Be it Enacted by the Legislature") and should be revised to "Be it Enacted by the Voters of the State of Idaho."

Substantive constitutionality. The expansion population tracked the ACA. The Supreme Court upheld the ACA's basic provisions in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). The AG identified no constitutional problem with the substance.

Emergency clause inappropriate. The Idaho initiative process has its own effective-date rule under § 34-1813: a successful initiative takes full force and effect from the date of the Governor's proclamation declaring voter approval. An emergency clause modeled on legislation does not affect that timing; the AG flagged it as procedurally inapt but not legally fatal.

Sunset clause not self-executing. This was the most consequential observation. Section 4 said the expansion would automatically end if federal financial contribution dropped below 90%. But the actual operation of Medicaid is governed by a state plan amendment approved by the federal Centers for Medicare and Medicaid Services (CMS). Once Idaho's plan was amended to expand eligibility, removing the expansion would require another CMS-approved amendment. CMS could delay or deny that amendment, leaving Idaho providing services at higher state cost while administrative or court appeals played out (potentially "anywhere from a few months to several years"). The text of the sunset clause did not solve that problem.

The AG also noted that implementation, even after voter approval, would require Idaho Medicaid to draft and submit a state plan amendment, which CMS could take up to 90 days to review. Plus the IT investment to update eligibility systems.

The recommendations were "advisory only." Petitioners were free to revise or proceed.

Common questions

Q: Did this initiative pass?

Yes. The initiative qualified for the November 2018 ballot as Proposition 2 and passed with about 60% of the vote. Idaho began Medicaid expansion enrollment in 2019.

Q: Was Proposition 2 challenged in court?

Yes. Idaho legislators and others challenged its constitutionality. In Regan v. Denney, 165 Idaho 15 (2019), the Idaho Supreme Court upheld the initiative against constitutional challenge.

Q: What is the 90/10 federal match rate the initiative referenced?

Under the Affordable Care Act, states that expand Medicaid to the 133% FPL population get a 90% federal match for that expansion population (with the state paying 10%), versus the much lower state share for traditional Medicaid populations. The 90% rate has been the political flashpoint for the federal-state cost-sharing of expansion.

Q: Why couldn't Idaho automatically end Medicaid expansion if federal funding dropped?

Because Medicaid is a state-federal partnership administered through a CMS-approved state plan. The plan controls eligibility. Once Idaho's plan covers the expansion population, removing them requires a state-plan amendment, which CMS has up to 90 days to review and could delay further if the change raises issues. The initiative's sunset clause assumed Idaho could just turn the expansion off, but the Medicaid administrative framework does not work that way.

Q: What's the difference between "an emergency clause" and the initiative effective date?

Legislation passed by the Idaho Legislature uses an emergency clause when it should take effect immediately rather than the default July 1 effective date. Initiatives have their own framework under § 34-1813: they take effect from the Governor's proclamation. An emergency clause attached to an initiative is, as the AG put it, procedurally inapt because it borrows the wrong framework.

Background and statutory framework

Idaho's Medicaid program lives in Idaho Code title 56, chapter 2, "Public Assistance Law." Sections 56-252 through 56-266 (now extending through 56-267) govern Medicaid eligibility and operation.

The Affordable Care Act expansion population is defined as adults under 65 with modified adjusted gross income at or below 133% of the federal poverty level (with a 5% income disregard producing an effective 138% threshold). Under NFIB v. Sebelius, the expansion is optional for states.

The Certificate of Review process under Idaho Code § 34-1809 requires the AG to review each filed initiative within 20 working days. The certificate is advisory; the petitioner can revise or proceed.

Citations

• Idaho Code § 34-1809 (Certificate of Review)
• Idaho Code § 34-1813 (effective date of initiatives)
• Idaho Code §§ 56-252, 56-262 (Public Assistance Law)
• Patient Protection and Affordable Care Act (Pub. L. 111-148)
• National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012)
• (Subsequent) Regan v. Denney, 165 Idaho 15 (2019) (upholding Proposition 2)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C110717.pdf

Original opinion text

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN

November 7, 2017

The Honorable Lawerence Denney
Idaho Secretary of State
Statehouse
VIA HAND DELIVERY
RE:

Certificate of Review
Proposed Initiative to Add a New Statute Requiring Idaho Expand Medicaid
Eligibility

Dear Secretary of State Denney:
An initiative petition was filed with your office on October 18, 2017. Pursuant to Idaho
Code § 34-1809, this office has reviewed the petition and prepared the following advisory
comments. Given the strict statutory timeframe within which this office must review the petition,
our review can only isolate areas of concern and cannot provide in-depth analysis of each issue
that may present problems. Further, under the review statute, the Attorney General's
recommendations are "advisory only." The petitioners are free to "accept them in whole or in
part." The opinions expressed in this review are only those that may affect the legality of the
initiative. This office offers no opinion regarding the policy issues raised by the proposed
initiative, nor the potential revenue or expense impact to the state budget.
BALLOT TITLE

Following the filing of the proposed initiative, this office will prepare short and long ballot
titles. The ballot titles should impartially and succinctly state the purpose of the measure without
being argumentative and without creating prejudice for or against the measure. While our office
prepares titles for the initiative, petitioners may submit proposed titles for consideration. Any
proposed titles should be consistent with the standard set forth above.
MATTER OF FORM

The proposed initiative is for the most part in proper legislative format, although there is a
small error in Section 2. It is not necessary to underline Section 1's newly proposed Idaho Code
section because it is not amending an existing section of the Idaho Code. Section 2 has a minor
error in that it fails to show amendments to the existing statute by striking out deleted words and

P.O. Box 83720, Boise, Idaho 83720-001 O
Telephone: (208) 334-2400, FAX: (208) 854-8071
Located at 700 W. Jefferson Street, Suite 210

Secretary of State Denney
November 7, 2017
Page 2 of 4

underlining added words and should read as follows:
56-262. DEFINITIONS. The definitions contained in section 56-252, Idaho Code, shall
apply to sections 56-260 through 56 266 56-267, Idaho Code.
The remaining two sections of the proposed measure will appear only in the Session Laws
and will not themselves be codified in Idaho Code.
The enactment clause and the emergency clause are consistent with the form those items
take in standard legislation. Due to the unique statutory framework governing the passage and
implementation of initiatives, the proponents may want to rework those portions of the petition to
reflect the initiative process rather than the standard legislative process. Specifically, the
enactment clause should read, "Be it Enacted by the Voters of the State ofldaho". The emergency
clause is discussed in greater detail below.
SUMMARY OF INITIATIVE AND MATTERS OF SUBSTANTIVE IMPORT

The proposed initiative does the following:
Section 1 enacts a new Idaho Code § 56-267 to be added to the chapter on Public Assistance
Law. This new section mandates that the state expand its Medicaid eligibility criteria to
include all individuals under age sixty-five (65) whose modified adjusted gross income is
less than or equal to the one hundred thirty-three percent (133%) of the federal poverty
level who are not otherwise eligible for Medicaid coverage.
Section 2 amends Idaho Code§ 56-262 in the chapter on Public Assistance Law to specify
that definitions found in Idaho Code§ 56-252 will apply to the new Idaho Code§ 56-267.
Section 3 contains an emergency clause specifying that the provisions of the initiative will
take full force and effect following passage and approval.
Section 4 is a version of a sunset clause, but instead of being tied to a specific date it is tied
to a contingent condition. It declares that the expansion provision shall become null and
void if the level of federal financial contribution for the expansion population is reduced
below ninety percent (90%).
Section 1

This section represents the substantive portion of the initiative. As stated above, this
section requires the state Medicaid program expand its eligibility criteria to include individuals
under age sixty-five (65) with modified adjusted gross incomes less than or equal to the one
hundred thirty-three percent (133%) of the federal poverty level who are not otherwise eligible for
Medicaid coverage. The proposed expansion population tracks exactly with the proposed
expansion population initially required by the Affordable Care Act (ACA). This definition for the

Secretary of State Denney
November 7, 2017
Page 3 of 4

expansion population also coincides with the population for which current federal law provides a
ninety/ten federal/state financial match rate.
The implementation of this section will require the Idaho Medicaid program to develop
and submit a state plan amendment to the federal Centers for Medicare & Medicaid Services
(CMS). Until that state plan amendment is reviewed and approved by CMS, the Idaho Medicaid
program cannot implement or administer Medicaid benefits for that expansion population as
contemplated by the initiative. The typical timeframe required to draft and submit a state plan
amendment to CMS is anywhere between sixty (60) and ninety (90) days. Following the
submission of a proposed state plan amendment, CMS has up to ninety (90) days to evaluate the
proposed amendment and issue its decision. Following receipt of the decision from CMS, the
Medicaid program could then begin the process of implementing the amendment including the
significant IT investment that would be required to update the electronic eligibility and
management systems.
As stated above, the language of this section tracks with provisions of the ACA. Those
basic provisions of the ACA were upheld by the United States Supreme Court against
constitutional challenge in National Federation oflndependent Business v. Sebelius, 567 U.S. 519,
132 S. Ct. 2566, 183 L. Ed. 2d 450 (2012).
Section 2
Section 2 presents no significant legal or policy issues.
Section 3
As stated above, Section 3 is an emergency clause which would be consistent with a piece
of legislation that had been passed by the legislature. However, given the different statutory
framework surrounding the initiative process, this clause is inappropriate. The effective date for a
law resulting from an initiative election is set forth in Idaho Code § 34-1813. Based upon the
provisions of section 34-1813, a successful initiative obtains the full force and effect of law from
the date of the proclamation issued by the governor declaring the initiative has been approved by
a majority of the votes cast. The emergency clause will not impact the date the initiative obtains
the force and effect of law as initiatives do not wait for the same July 1 effective date that applies
to legislation passed by the legislature. Since the effective date of the initiative would impact only
the date on which the Idaho Medicaid program would be directed to seek the amendment of the
Idaho Medicaid state plan, and not the date on which the proposed state plan amendment is to take
effect, the statutory effective date does not pose a significant burden upon the Idaho Medicaid
program.
Section 4
The sunset clause set forth in Section 4 of the proposed initiative presents a unique issue.
As stated in the discussion of Section 1, the operation of the Medicaid program is governed by an
approved state plan and until the program could get an amendment approved by CMS, the program

Secretary of State Denney
November 7, 2017
Page 4 of 4

would be required to continue providing the services resulting from Section 1 of the initiative even
if the sunset clause in Section 4 was triggered. The same amendment process outlined in the
analysis of Section 1 would apply including the anticipated timelines for the submission approval
and implementation of a state plan amendment arising because of the sunset clause in Section 4.
Although the program is not aware of CMS ever refusing to allow a state to discontinue an
optional service, there is a possibility that the amendment to remove this service could be delayed
or even denied, either of which could limit the application of the Section 4 sunset clause. If CMS
outright denies the proposed amendment to return to the current eligibility criteria, the Medicaid
program would have the opportunity to challenge that both administratively and if necessary
through the courts; however, the program would be required to continue providing those services
with a higher percentage of state funds until a final decision could be obtained. The time that the
state would have to continue providing services could be anywhere from a few months to several
years.
CERTIFICATION

I HEREBY CERTIFY that the enclosed measure has been reviewed for form, style, and
matters of substantive import. The recommendations set forth above have been communicated to
the Petitioner via a copy of this Certification of Review, deposited in the U.S. Mail to Emily
Strizich, 225 N. Adams, Moscow, Idaho 83843.
Sincerely,

LAWREN CE G. WASDEN
Attorney General
Analysis by:

M. Scott Keim
Deputy Attorney General