2026 Idaho Legislative Session Recap
Idaho’s 2026 legislative session adjourned sine die on April 2. The session addressed a range of healthcare issues, including Medicaid spending, Medicaid expansion policy, rural health funding, behavioral health services, and healthcare workforce capacity. The session ended with a budget-first approach: lawmakers focused less on sweeping healthcare policy changes and more on cost control, targeted program adjustments, and how to manage major new federal rural health funding.
HCA Healthcare is providing this end-of-session update to keep colleagues informed on key legislative developments that may affect care and access in the communities we serve.
Budget
Idaho ended the session with a cautious budget strategy shaped by revenue pressure and reserve protection. The FY 2027 budget, largely reflective of Governor Brad Little’s “Enduring Idaho” plan, included about $5.6 billion in state General Fund spending, just under the Legislature’s projected $5.62 billion revenue forecast. Lawmakers supported this approach by passing the FY 2026 rescissions bill, SB 1331, and approving more than $225 million in one-time transfers across FY 26 and FY 27, leaving an estimated $150 million ending balance to help cushion against uncertainty.
That same approach carried into health spending. Lawmakers approved a revised FY 27 Health and Human Services budget in SB 1435 after earlier healthcare budget debates had stalled. Overall, SB 1435 reduced the Health and Human Services budget by $68.4 million in General Fund spending and $351.7 million in total funds for FY 2027.
Within that broader budget, lawmakers pursued about $45 million in targeted Medicaid General Fund reductions. Those savings reflected the continuation of the 4% provider reimbursement rate cut imposed by the governor in 2025, along with residential habilitation changes tied to HB 863. At the same time, lawmakers restored about $31 million for Assertive Community Treatment and peer support services for the rest of FY 26 and all of FY 27.
Medicaid
Much of the session’s healthcare debate centered on Medicaid. HB 863 passed and was signed into law, advancing about $22 million in savings through changes to residential rehabilitation provider reimbursement. Lawmakers also approved HB 923, an appropriations bill for the Department of Administration that includes funding for a Medicaid procurement bureau chief as the state continues preparing for managed care implementation.
HB 913 was one of the session’s most consequential healthcare policy bills and proposed work and community engagement requirements for adults covered under Medicaid expansion. The bill requires implementation of Medicaid expansion work requirements by December 31, including a three-month work-history lookback and six-month eligibility redeterminations. Late-session reporting projected the policy could reduce enrollment by up to 44%, about 34,000 people. The bill passed both chambers and was delivered to the governor on April 2.
The session reinforced Idaho’s planned transition to comprehensive Medicaid managed care, with the Legislature’s Medicaid Review Panel set to continue oversight during the interim.
Rural Health Transformation Program
The Rural Health Transformation Program (RHTP) was central to end-of-session discussions. Idaho was awarded nearly $186 million in first year funding, leaving governance and administration as the primary outstanding issues.
Policy bills from both the House and Senate to establish legislative oversight of the RHTP program stalled, reflecting disagreement over the composition and charge of a legislative oversight committee. By the close of session, lawmakers resolved the issue through budget language in SB 1453 establishing legislative involvement, rather than through the conventional standalone policy path.
SB 1453 appropriated roughly $295 million to the Idaho Department of Health and Welfare for the first phase of the program and created a legislative oversight committee. Over five years, Idaho is expected to receive nearly $930 million through the RHTP. For hospitals and rural providers, this was one of the session’s most important outcomes because the Legislature’s involvement in the award process may influence how funds are deployed to enhance rural healthcare in Idaho.
Behavioral Health
One important late-session development was the restoration of Assertive Community Treatment (ACT) and peer support services. Lawmakers restored this funding after the earlier cuts drew strong objections from providers, law enforcement, and families, and after multiple patient deaths were reported following the service reductions.
That restoration does not eliminate the broader Medicaid cuts, but it does signal that lawmakers were willing to reverse course where the operational and human consequences became especially clear.
Tax Conformity
HB 559 updated Idaho tax law to conform with the federal changes in H.R. 1, the One Big Beautiful Bill Act (OBBBA). According to the Idaho State Tax Commission, the law includes the larger standard deduction, the enhanced senior deduction, and deductions for qualified tips, car loan interest, and overtime compensation. Governor Little’s budget materials estimated the ongoing revenue impact at about $155 million.
The governor signed the bill on February 10. While this was not a healthcare bill, it mattered to the healthcare budget conversation because lawmakers were trying to absorb reduced revenue while also cutting Medicaid spending.
