The Idaho Senate has passed a rewritten health and human services budget that includes deeper cuts to Medicaid services than the original proposal, leaving disability advocates and some legislators concerned about the impact on Idaho’s most vulnerable residents. Senate Bill 1435, the new fiscal year 2027 maintenance of operations budget for the Idaho Department of Health and Welfare, passed despite opposition from at least one longtime Republican senator who called the cuts “punishment” for Idaho’s most vulnerable citizens. For Canyon County families who rely on state Medicaid services — including disability and residential habilitation programs — the budget changes could have real and lasting consequences.
Background: A Budget That Failed and Was Rewritten
The new budget replaces Senate Bill 1375, the original health and human services budget that the Idaho Senate rejected on March 12 following an unusually pointed floor debate. Sen. Jim Guthrie, R-McCammon, had challenged his colleagues during that debate, calling the across-the-board cuts applied to most state agencies “a defining moment” and urging the Legislature to “do better” for Idahoans who depend on state services.
Rather than trimming the cuts, the rewritten Senate Bill 1435 goes further. The new version incorporates changes from House Bill 863, which reduces provider rates for residential rehabilitation programs — services used by Idahoans with significant physical or developmental disabilities who require supported living environments. That addition triggered an additional $21 million in state-level cuts to Medicaid disability services.
Because Idaho’s Medicaid program operates on a federal matching structure, the state’s decision to cut $21 million in state funding also means forfeiting an estimated $44 million in federal matching funds — a combined hit of nearly $65 million to services for people with disabilities.
Key Details: The Numbers Behind the Cuts
Senate Bill 1435 makes two significant changes compared to the budget that failed earlier this month. In addition to the $21 million in new cuts tied to residential habilitation program rate reductions, the new budget also includes a one-time removal of $14 million in federal funding.
When totaled, the new budget reduces the general fund portion of the state budget by $68.4 million, or 5.6 percent, compared to current spending. Total all-funds reductions — including federal dollars — come to $351.7 million, representing a 5.8 percent reduction in the overall health and welfare budget for fiscal year 2027.
Sen. Guthrie voted against the rewritten budget as well, making clear he viewed the new version as a step backward rather than the improvement he had called for. “I felt we could have done better than what was contained in Senate Bill 1375, but what we have done before us is a replacement bill that cuts an additional $64,963,200, and it feels to me like punishment for not conforming to Senate Bill 1375,” Guthrie said on the Senate floor.
Guthrie did not hold back in describing who bears the real cost of the reductions. “We’re not really punishing ourselves,” he said. “We’re punishing Idaho’s most vulnerable.”
For more on how this budget debate fits into broader Idaho state government and fiscal decisions this session, readers can follow statewide reporting at Idaho News.
Impact on Canyon County Residents
Canyon County is home to a significant number of residents who depend on Idaho Department of Health and Welfare programs, including Medicaid-funded residential habilitation services for individuals with developmental and physical disabilities. Nampa, Caldwell, and the surrounding communities support a range of group homes, supported living programs, and disability service providers whose reimbursement rates are directly affected by the changes embedded in House Bill 863 and now written into the new budget.
Providers operating in the Treasure Valley have already been navigating staffing shortages and rising operational costs. Rate cuts to residential rehabilitation programs may force some providers to reduce capacity, limit new admissions, or in the worst case, close programs that Canyon County families depend on to support their loved ones. Families with disabled members in Nampa and Caldwell who currently receive these services or are on waiting lists for them face the most direct uncertainty from the Legislature’s decisions.
The forfeiture of $44 million in federal matching funds compounds the concern. That money, which would have flowed into Idaho under the existing federal Medicaid framework, now will not — meaning fewer total dollars available to fund services statewide.
What Comes Next
Senate Bill 1435 now moves forward in the Idaho legislative process. Canyon County residents and disability service providers who want to track the bill’s progress or make their voices heard can contact their local legislators representing Nampa, Caldwell, and Middleton. The Idaho Legislature’s official website lists committee assignments, contact information for all senators and representatives, and upcoming hearing schedules. Organizations serving adults and children with disabilities in Canyon County are encouraged to engage directly with the Joint Finance-Appropriations Committee as the fiscal year 2027 budget is finalized in the coming weeks.