Money Moves… | May 19, 2023

Narrator: Presentation of Idaho Reports on Idaho Public Television is made possible through the generous support of the Laura Moore Cunningham Foundation, committed to fulfilling the Moore and Bettis family legacy of building the great state of Idaho.

By the Friends of Idaho Public Television and by the Corporation for Public Broadcasting.

Melissa Davlin: The University of Idaho has taken the first steps to acquire the University of Phoenix in a surprise move.

The price tag?

More than half a billion dollars.

So what's in it for us?

I'm Melissa Davlin.

Idaho Reports starts now.

Hello and welcome to Idaho Reports.

This week, Shane Leach, administrator for the Idaho Department of Health and Welfare's Division of Welfare and Self-Reliance, gives us an update on how many people the state has removed from Medicaid rolls since the end of the COVID 19 public health emergency.

Then Kevin Richert of Idaho Education News joins me to discuss the surprise move by the University of Idaho to acquire the University of Phoenix.

Plus, the results of this week's school bond and levy elections.

But first, let's get you caught up on the week.

This week, the Idaho Fish and Game Commission reduced the number of available pronghorn and deer controlled hunt tags in some eastern areas of the state due to a drop in population after a long, cold winter.

In some areas, the commission canceled planned hunts entirely.

The reductions and cancellations affect a small number of controlled hunt areas in the southeast corner of the state, as well as just northwest of Rexburg.

For more information on those cancellations, including a map of the affected areas, visit our website at IdahoReports.org Idaho Attorney General Raul Labrador is leading a coalition of 19 states in signing on to a lawsuit by the National Sports Shooting Foundation against the state of New Jersey, against a law that holds firearm manufacturers responsible for crimes involving guns, Labrador said in a press release.

Quote: “States should not punish firearm businesses operating lawfully for the actions of criminals.

New Jersey fails to understand that evil people pull the trigger, not the manufacturers of the guns.” unquote.

One of the federal provisions of the COVID 19 public emergency was states weren't allowed to remove anyone from Medicaid rolls, even if those individuals no longer qualified for Medicaid.

Once the public health emergency ended on April 1st, that provision also ended.

Starting in February, the Idaho Department of Health and Welfare began the process of reaching out to 150,000 Idahoans on Medicaid to see if they still qualify for the program based on income and residency guidelines and giving them 60 days to respond.

That redetermination process is ongoing and is scheduled to wrap up later this summer.

On Friday, I sat down with Shane Leach from the Idaho Department of Health and Welfare to get an update on how that process is going.

How many people have been removed from the Medicaid rolls so far.

And whether it might save the state any money in the Medicaid budget.

Thanks so much for joining us this week.

First of all, how many people have received requests from the department to engage in this redetermination process?

Shane Leach: Yeah, Currently there's 153,000 people in what we call Medicaid protection.

So those are the individuals that will be due starting from April 1st or continuing the unwinding through July.

Currently, we've noticed over about 100,000 of those individuals to actually respond and follow up with their redetermination.

Melissa Davlin: When you say that you've noticed these individuals, that means you've started the process reaching out to them and asking them to prove that they're still eligible, basically.

Shane Leach: Exactly.

Each month we send out a different volume of renewals.

So not all at once.

We've been spreading them out over time.

Melissa Davlin: So in that group of about 100,000 people, what's the response rate so far?

Shane Leach: Yeah.

Currently, we've processed about 50,000 individuals.

Of all the people on Medicaid protection.

Melissa Davlin: So you've processed them and some of them, of course, have been removed.

And we'll get to that in a second.

But how many of those folks have been removed because they just didn't respond?

Shane Leach: Yeah, we're still working on that number.

This, actually the end of this month, the end of May will be the first month that we'll actually end individuals coverage that have not responded yet.

Even though we've started the enrolling, noticing people to respond to us beginning actually in April.

This will be the first month of actual closures if people don't get in touch with us.

Melissa Davlin: Got it.

So of the about 50,000 people who you have already processed, how many of those have been removed from the Medicaid rolls?

Shane Leach: Yeah, about 30,000 of those are no longer eligible and 20,000 are still eligible.

Melissa Davlin: So more than half.

Shane Leach: Yeah Melissa Davlin: Basically.

Let's talk about the reasons that those folks are no longer eligible.

I'm assuming that most of them are because of income requirements.

Shane Leach: Correct.

It's a it's a could be many reasons of course.

A lot of these individuals have been on what we call Medicaid protection for the last couple of years.

Because of the pandemic we were not able to disenroll anybody unless they called us because they wanted no longer coverage.

Passed away, of course, or if they actually moved out of the state of Idaho.

And so because people have been on Medicaid during the public health emergency, not completing renewals, life changes.

Right.

A lot of changes have happened in the last couple of years.

So exactly how many people are over income?

But there's also part of that eligibility requirements could be family size.

Can impact things, right?

A family gets smaller or bigger could obviously change the eligibility limit.

Resources for one for part of Medicaid, which is Aged, Blind and Disabled, is one of the programs.

And so different things like that, of course, can can impact eligibility.

Melissa Davlin: You know, this was a big push during the legislative session.

You know, during the session, there were some lawmakers who said that they wanted the Department of Health and Welfare to move even faster on this redetermination process.

While a handful of people said that a six month timeline was too fast to process 150,000 people.

How is your division balancing those two concerns?

Shane Leach: Yeah, that's a it's a great question.

Obviously, there's a balance between our current workforce, our current workload that we have from day to day, and this additional 150,000 individuals to process is on top of all of our daily work.

So we certainly had to balance that between the needs of the legislature to obviously focus on completing our renewals and working with our federal partners who actually are providing up to over a year to process individuals because they want to ensure, of course, not only that we do it timely, but also accuracy is involved and we make sure people have enough time to get in touch with us and be able to complete the renewal to see if they're still eligible or not.

So with all those factors in, we kind of looked at to understand what can we do based off previous experience.

One of those being Medicaid expansion.

So in 2019 we went through Medicaid expansion, which caused a really big increase in the number of individuals on Medicaid.

So we have some basis of what we can handle, which is kind of on top of our caseload.

And looking at Medicaid expansion, other annual periods of open enrollment when we work with our state based marketplace, we have really big spikes in workload as well.

And so we put all those factors together and that's kind of what gave us the path to know that we could do this within a six month period.

Melissa Davlin: Have there been any unexpected obstacles that your staff has run into?

Shane Leach: No real unexpected obstacles.

You know, one of our our biggest things, of course, is, you know, we're doing everything we can to notice all of our participants, get in touch with them.

Because it's been over a couple of years now since we've heard from a lot of individuals.

And that is one of the concerns with our federal partners as well.

Of course, is reaching people, making sure they get our notices and then they have the time to respond.

So that's just an obstacle.

I think it's an expected obstacle.

We know that that that's their it's a concern.

It's not just Idaho.

It's across the country.

So we're working diligently to actually go above and beyond the CMS requirements to actually notice people send additional notices.

We're also working on sending individuals text, for example.

So we're trying different modalities to do our outreach to make sure people know they need to do something.

And if they don't follow through on getting in touch with us and completing the renewal, they may actually lose their benefits.

Melissa Davlin: Those who lose those benefits, to be clear, get automatically referred to Your Health Idaho, the state based insurance exchange.

Shane Leach: Correct.

If they do get in touch with us, we complete the renewal.

We find that they're over income.

Those are the main ones that then would get transferred over to the state based marketplace.

The state based marketplace, Your Health Idaho, then we'll work with those individuals to see if they can qualify for that advance premium tax credits or APC, which would give them obviously a reduced cost for a subsidy.

So it's a really good transition for individuals that may now no longer be eligible for Medicaid but could qualify for the tax credit.

Melissa Davlin: And this came up at the Department of Health and Welfare Board meeting earlier this week.

But not everybody will qualify for that tax that tax benefit on Your Health Idaho.

But many of them do.

Shane Leach: Yeah Melissa Davlin: But one reason the legislature was so keen on this process was to cut Medicaid costs.

You know, the Medicaid budget has been rising because of so many factors.

Do we yet know how much these enrollees, the 30,000 enrollees who have so far been removed, have?

Do we know yet how much they were contributing to that rising Medicaid budget?

Shane Leach: Yeah, we don't have all that information right now, obviously, until we're completely through the unwinding, because I said there's the individuals that have responded and are no longer eligible.

There's also a lot of the individuals that we haven't heard from yet.

Right.

And we just don't know.

They may follow up.

They may come back.

There's a thing a term we have which is called churn within our rolls, which means maybe people might fall off and then come back on.

So we're we'll be in the process of measuring that for a few months.

Um, one of the concerns I would add is of the 150,000 rough people on Medicaid protection, I think about 60 something thousand of those were actually on Medicaid expansion.

And so that was a lot of the discussions, I believe, with the legislature of these individuals, not only just the Medicaid protection, but how many are on Medicaid expansion as they're looking at costs.

So as we go through, obviously, the unwinding that will follow up, right, after this summer once we have that information.

Melissa Davlin: To be clear, there are a lot of different factors in the Medicaid budget.

It's not just the number of people who are enrolled in Medicaid.

Shane Leach: Yeah, very much so.

I mean, not everybody is going to the doctor, of course.

Right?

They may be enrolled.

You know, a lot of the population is children and adults.

So obviously different cost.

And there is a lag time, of course, between when, you know, going to a doctor and claims might be submitted and then ultimately paid.

Melissa Davlin: All right.

Shane Leach, administrator for the Division of Self-Reliance at the Idaho Department of Health and Welfare, Thanks so much for joining us.

Shane Leach: Thank you so much.

Thanks for having me.

Melissa Davlin: It was a big week for education with 18 school bonds and levies on the ballot across 16 school districts around the state.

We'll get to those results in a bit.

But first, on Wednesday, news broke that the University of Idaho has been in talks for months to acquire the University of Phoenix for $550 million.

On Thursday, just one day after that news became public, the state Board of Education unanimously approved a request from UI to form a nonprofit that would handle that acquisition.

Here to discuss is Kevin Richert of Idaho Education News.

Kevin, it's been quite a week.

Kevin Richert: It really has been.

And this this news about U of I and University of Phoenix came from out of nowhere.

And we're just now starting to come to grips with the enormity of this transaction.

This is a $550 million purchase.

It involves $685 million of bonding to cover everything.

That is about as much as we're going to spend as a state on the four 4-year colleges and universities in 2023, 24, 24.

It is a staggering amount of money and it is a process that is unfolded in rapid, rapid fire over the past 48 hours.

Melissa Davlin: You touched on this briefly, but this money isn't coming from just cash on hand that the university has.

This is this is from bonds that the the nonprofit will acquire.

Kevin Richert: Right.

The separate entity, the nonprofit NewU would be doing the bonding to acquire the project to to acquire University of Phoenix.

And the University of Idaho has been careful to say that there's no taxpayer money involved in the bonding.

There is some financial risk, though, for the university.

Melissa Davlin: Let's talk a little bit about that financial risk.

What does it look like and and how do we get there?

What what's the path to see that risk?

Kevin Richert: The path would come if NewU was unable to make its payments to cover the purchase of University of Phoenix.

At that point, the university would step in to the tune of up to $10 million per year to backstop those payments.

Now, that is a failsafe, and it's not immediately clear to me exactly where within the university's budget that's going to come if that were to come to pass.

Melissa Davlin: There are a lot of things that aren't clear.

Kevin Richert: There's a lot we're still trying to sort out here.

Melissa Davlin: One of the questions that I had was, you know, NewU, this nonprofit that was in the university is forming to handle their bonding with state authority.

Kevin Richert: Correct.

Melissa Davlin: How can it do that and taxpayers not be on the hook?

Kevin Richert: That's a really good question.

I mean, I think there's a lot of governance questions, a lot of process questions that we're trying to sort out.

And really, what we had on Thursday, the state board met for 90 minutes before voting unanimously to give the U of I the go ahead to proceed on this purchase.

There were a lot of nitty gritty questions that were being asked in that meeting, to be fair.

But a lot of it was focused on the money flow.

How is the University of Idaho going to make money off of this deal?

And we really haven't talked about that yet.

How would that backstop that $10 million failsafe kick in?

That was really the focus of the meeting.

These process questions, these governance questions are still you know, it█s still questions we need to sort out.

Melissa Davlin: One more question on the governance issue.

So the two universities will operate independently.

They'll have separate leadership and presidents.

But this separate nonprofit entity, NewU, it's still connected to the University of Idaho, to be clear.

I mean, it's address is the Kibby Dome in Moscow.

Kevin Richert: Right.

And the individual heading the the NewU board at this point appears to be a counsel for the university.

So the connections between NewU and U of I are pretty clear.

Melissa Davlin: At Thursday's meeting, one of the board members touched on this.

But University of Phoenix doesn't have the best reputation nationally and hasn't for some time.

Even if UI isn't financially on the hook for these issues, what's the potential hit to UI█s reputation here when it acquires this for profit entity?

Kevin Richert: I think that's something that the U of I is really going to have to to work on.

I think the messaging and the the framing of this merger, let's call it a merger for for lack of a better word, that's going to be something that the U of I is going to have to to deal with now.

Scott Green, the president of the U of I talked about the reputational issues on Thursday, and he acknowledged that University of Phoenix has had problems in the past.

He insists that this new team that really wants to go the nonprofit route, really wants to get back to nonprofit education, student centric service.

He thinks that they're wanting to turn the page as much as the U of I wants to, to partner with an online vendor.

So we'll see.

But, you know, if you watch social media over the past couple of days, you know, everybody has a wisecrack about this merger and about the University of Phoenix.

And fair or unfair.

That's something that the U of I is going to have to combat over the next few months or years.

Melissa Davlin: I think the least negative reaction I saw was, well, that's weird.

Most of the reaction that I have seen and I you know, I went to the University, I have I still have, you know, so many friends and connections there.

And there was a lot of frustration with how this happened, secretly.

The University of Phoenix compelled University of Idaho to sign a nondisclosure agreement, as so these talks have been going on for months, even though we have only known about it for 48 hours.

Kevin Richert: Right.

We had the three executive sessions involving the state Board of Education dating back to March while the university was was operating under the NDA.

That was a question that came up in the state board meeting on Thursday.

President Green said, look, in order to have a conversation with the University of Phoenix, we had to go the NDA route.

But I think that is leaving a lot of people with questions and a lot of people with skepticism.

One of those people, by the way, was Representative John Gannon, Democrat from Boise.

He sat in on the meeting.

He was sitting next to me during the state board meeting on Thursday.

He didn't comment.

There was no public comment period during the state board meeting on Thursday.

Afterwards, he wrote a letter to the state board expressing his concerns about this process, the secrecy, the kind of take it or leave it.

We've got to do this this week in order to get an application into the University of Phoenix's accreditors by Friday.

Today, two days out from when this became public, his concern is this secret.

It's it's kind of got to take it or leave it aspect to it.

And this isn't the right way to be going about this.

Melissa Davlin: And he isn't the only one, the only lawmaker who share those concerns.

I watched the board meeting online.

The YouTube channel still had the chat function going.

And I saw Representative Mike Kingsley in there, a Republican from Lewiston who was upset about the same thing.

The lack of transparency and the lack of input from lawmakers.

Kevin Richert: This might be the first time that you're seeing questions about transparency being raised on the same project by the Idaho Statesman's editorial board and the Idaho Freedom Foundation.

So if nothing else, the University of Idaho is bringing people together.

Melissa Davlin: You know what?

As an alum, I appreciate that.

And real quick, before we move on, let's talk about the pluses that President Scott Green was was advocating for in this meeting.

This has the potential to generate a lot of income for the University of Idaho if it goes well.

Kevin Richert: Right.

And it's still not completely clear to me anyway about how this money all flows.

But they the way this thing is structured is that the first $10 million of revenue goes straight to the U of I that they can use for strategic strategic initiatives.

The university is saying we think there's going to be a lot more that comes through, that their cash flow is much more favorable than that.

So 10 million is really just a starting point.

You know, they were talking about upwards of $170 million of revenue for the university by the year 2030.

There's a lot of money at stake here.

And I think really for the university and for the state board, one of the things that they keep pointing to is we need to come up with an online education system in this state.

This is maybe the quickest way to do it because University of Phoenix has that platform already in place.

It's been in existence for years.

Melissa Davlin: The state board and University of Idaho were already moving forward with an online platform, Online Idaho, to kind of address some of those concerns, right?

Kevin Richert: Which the U of I says is still going to be in place.

It's still going to be operating as a separate entity and the U of I█s own online classes will continue to operate.

So the U of I is really trying to, you know, set up a lot of walls here between its operations in the University of Phoenix█s operations.

Melissa Davlin: Well, so many questions that we will be looking for answers for over the coming months.

Kevin Richert: Just getting started here.

Melissa Davlin: President Green, if you want to join us, we would love to have you.

So moving on to other higher education news this week.

Tuition freezes at those four year higher education institutes in Idaho are no longer.

What's going on with that?

What do we know?

Kevin Richert: We know that tuition and fees are going to go up at the four year schools by about $400 per year per student.

It'll vary a little bit, a few dollars here and there by institutions.

This is a three year tuition freeze that was instituted, if you recall, right before the pandemic.

So it's really hard to tell how that really worked.

You know, it's hard to differentiate what happened with student tuition, what happened to having students make decisions about whether or not to go to college.

How did the freeze factor and how did the pandemic factor in?

At any rate, what we did see over these three years was, you know, the dip in enrollment during the pandemic, a rebound almost the pre-pandemic levels in these three years of the freeze.

But what you heard on Monday from the state board and a state board meeting now feels like happened three months ago.

Board members and university leaders all said we were reluctant to do this, but we don't see much of a choice because inflation is really hitting the institutions, the cost of pay raises and trying to offset staff turnover that hits the universities directly because the pay raises instituted by the legislature this year were not fully funded by the legislature.

So what you heard on Monday was the board and the universities and colleges saying we we have no choice here.

Melissa Davlin: Now, briefly, we also have new news on North Idaho College and its ongoing saga about the potential for its accreditation to be pulled.

What do we know?

Kevin Richert: We saw a report from the accreditation team that came out on Thursday, and the report said NIC has made some progress.

We've seen some improvements in these past few weeks in response to the accreditation concerns.

But what you saw in that report was the writer of the report saying it has to sustain.

It can't just be a one off.

We've got to see a continued commitment on the college's behalf.

Some interesting stuff, though, in that report, too.

Quantifying the cost of enrollment declines at North Idaho College.

A $500,000 hit this year, another $500,000 hit next year.

And interestingly, in the report, two of the trustees were said this is not a long term strategic initiative that the college should be taking on.

Reversing these enrollment declines that have been going on for a decade that really have a bottom line impact on the college.

Melissa Davlin: Lots going on there for sure.

In public schools, K through 12.

School bonds and levies, there were a number on the ballot on Tuesday.

Do we know or or can you tell us, rather, how many of those passed and what kind of what kind of effect that's going to have on property tax rules?

Kevin Richert: So by and large, it was a pretty good night for public schools across the state.

You had 18 measures on the ballot, 16 of them passed.

Now, the biggest one of the bunch was West Ada, seeking a record $500 million levy for building projects that failed wasn't really all that close.

I think they got like 43% of the vote.

Needed 55%.

So for West Ada, district dealing with growth, you're looking at more kids in portables.

Longer bus commutes for kids.

More wait listing, probably for career technical programs.

Bonneville also had a bond issue fail narrowly that would have built an elementary school.

They're dealing with all the same kind of crowding issues that West Ada is dealing with.

But really kind of a mixed bag on these school elections, because Vallivue in Canyon County, another fast growing district, they got a bond issue passed.

They're going to be building a couple of new elementary schools.

And maybe the election that some of us were watching most closely was in Coeur d█Alene.

A repeat on a $25 million a year supplemental levy.

This will this will be in place now for two years.

So $50 million, that district was saying if this doesn't pass, we're looking at maybe closing schools, we're looking at maybe eliminating extracurriculars, sports, elective courses.

Voters responded.

That passed really comfortably.

It got almost 65% of the vote.

Melissa Davlin: Roughly.

How many of these were repeat asks for the voters.

Kevin Richert: So as I calculated it and wrote about it this week, there were six districts that had what you could call repeats.

They█re, they were versions of a proposal, or variations on a proposal had failed.

Going back to August, Vallivue is a good example.

They had a bond issue that failed in August.

This one is actually a bigger ask and it passed narrowly, but it passed.

Idaho Falls had a huge bond issue on the ballot in November.

They were looking for $250 million.

They came back this time around much smaller.

It was a levy.

It was $33 million.

It was a really smaller, much smaller version of what West Ada was trying to do with a levy for school buildings.

It passed.

So they've got the green light to build a school that they need to deal with growth on the outskirts of town.

Melissa Davlin: I know that a lot of the online chatter I saw in the West Ada district community that, you know, the voters who were eligible to vote on that, a lot of people were skeptical about the the size of the ask.

You know, as you said, that's a lot of money and also what it would be used for, because it wasn't just school facilities, it was subsidized child care for school employees and things along that line that that raised some eyebrows, I know, with voters.

Kevin Richert: And I think that what you will maybe see in the future with West Ada, we don't really know what West Ada█s next move is going to be.

But based on what we saw on Tuesday with these repeat bond and levees passing is there's a more than decent chance at West Ada and Bonneville will be back with different proposals.

Maybe smaller proposals.

Maybe fine tuned in one manner or another.

And I know that raises the ire of lawmakers who want to curb these elections.

But at this point, this is kind of how the process works.

You know, districts going back and forth sometimes with their patrons and saying, well, okay, that was too much.

What if we came back with this?

Idaho Falls is being, serves as a really good example.

$250 million was clearly too much for patrons to stomach in November.

$33 million.

A lot different story.

Melissa Davlin: And to be specific, you know, that's raised the ire of lawmakers who have responded with bills to say that you can't run a repeat levy or bond ask within, say, 12 months or 18 months.

It's dependent on the proposal.

None of them have been successful.

Kevin Richert: Three have passed the House and in recent years, and they would have limited bond issues, not levies, but bond issues requiring districts to wait 11 months, which effectively means you're waiting a year before you run another bond issue.

Had that bill been on the had it become law, had it been on the books, Vallivue would have had to wait until August to rerun its bond issue.

I don't know if that makes a whole lot of difference in Vallivue, but I think what it suggests to you, though, is that lawmakers are really skeptical of this whole school election process.

This is a legislature that eliminated the March school election date entirely this session.

It'll be really interesting to see what sort of restrictions the legislature comes back with and tries to to pursue in 2024.

I know we'll see something.

We just don't know what it'll look like.

Melissa Davlin: So much to get to.

We have about 90 seconds left.

I'd love an update on the Empowering Parents Grant program.

Kevin Richert: A couple of things I'm watching for here.

The program is on on hold somewhat.

The state board is reviewing purchases made on this platform.

And just to refresh.

This is the platform that allows parents to get money for micro grants to cover a computer, or counseling, or or tutoring.

State Board of Education is saying that some of that money may have gone towards items that are not authorized purchases.

Smartwatches, TVs, clothes.

So they're doing a review.

And at the same time, we're expecting the formation of a parent advisory committee to take a look at how this program should should go forward.

Because remember, now we're talking about a permanent program.

You know, we're going from a $50 million, one time federally funded grant program to $30 million of state funding with the idea of this being a permanent program.

So a lot to watch for.

Melissa Davlin: Annually Kevin Richert: Yes, $30 million a year.

So a lot to watch for on that.

Melissa Davlin: All right.

Anything else you're watching for in the next few weeks as we hit the summer months and schools are wrapping up for the season.

Kevin Richert: I think our hands are full.

Melissa Davlin: Just a bit Kevin Richert: Just a little.

Melissa Davlin: Just a little bit.

All right, Kevin Richert, Idaho Education News.

Thank you so much for joining us.

If you missed it, the Idaho Reports podcast gives you an overview of some of the library trustee races this Tuesday.

You can find the link at IdahoReports.org Thanks so much for watching and we'll see you next week.

Narrator: Presentation of Idaho Reports on Idaho Public Television is made possible through the generous support of the Laura Moore Cunningham Foundation, committed to fulfilling the Moore and Bettis family legacy of building the great state of Idaho.

By the Friends of Idaho Public Television and by the Corporation for Public Broadcasting.