This story has been updated to include a statement from the Idaho Department of Health and Welfare.

SANDPOINT — In the halls of the Bonner Community Food Bank, Michael Nickerson was helping a client when the individual told an employee there of the impending end to his service. 

“Did you know Mike’s not going to be working next week? This is Mike’s last week,” Nickerson recounted his client joking. 

While playful in nature, Nickerson said the words immediately brought tears to the eyes of the employee, who had grown accustomed to seeing Nickerson helping community members, and naturally to his eyes as well.  

“I was this close to crying at the food bank today. This is really emotional stuff,” Nickerson said, punctuated with a heavy sigh. “Especially with my colleagues, we all have expressed, ‘How can they do this?’” 

Nickerson won’t be accompanying his client to the food bank this week because of cuts to Idaho’s Medicaid services which eliminated coverage for his job as a peer support specialist. In his position, Nickerson was providing support for people suffering from severe mental illness, like depression and schizophrenia, who have committed themselves to a path of recovery. 

Nickerson said what he did varied by the client; some days he helped people of all ages get out of bed and go to the food bank while others needed someone to decompress with. Lacey Olson, a local mental health care provider, said these services provide a type of support that therapists cannot. 

"That peer-to-peer interaction is so valuable because it creates a different network and a different level of understanding,” Olson said. “I can offer a lot of guidance and support, but I’m not on that level. To go without that service, a lot of clients are like, ‘No I don’t want another service.’” 

The cuts, which went into effect Dec. 1, abruptly ended the service that Nickerson has provided to the community for eight-and-a-half years. Olson said Magellan of Idaho, the private company that runs the state’s Medicaid mental health benefits, only provided the required 30 days' notice for the change. 

She said that mental health professionals typically prefer to have at least three months to prepare the client for changes and help ensure a smooth transition. 

“There was no coordination. It was just decided upon, and that’s not the way that those things should ever go,” Olson said. “A sudden change like that can trigger a psychotic episode and they could end up in the hospital, or it could turn into something else and have a PTSD reaction.” 

The Idaho Capital Sun reported that the cuts stem from Idaho’s attempt to avoid a projected budget shortfall. Magellan announced the cuts following a 4% cut to pay rates by the Idaho Department of Health and Welfare. 

In a statement provided to the Idaho Capital Sun, a spokesperson for Magellan, Kristen Durocher, said the contractor had to make cuts and was left with few options. Durocher said the company worked with the IDHW to identify changes to “option programs that are allowable under the law.” 

Nickerson described the decision to cut peer support services as disconnected, and it left him and his colleagues dumbfounded.  

“What hits the hardest is all the people I work with and care about that aren’t going to be receiving services that they need,” Nickerson said. “Just having someone that you know is going to show up every week and be there for you at the same time, at the same place it’s so much for these people.” 

The cuts have already prompted two lawsuits against the state of Idaho, one in state court from four mental health clinics in the state trying to pause the cuts. The other is a class action lawsuit filed in federal court by five patients receiving the services. 

Olson said the cuts not only leave clients more vulnerable but will put further strain on the state’s already struggling mental health system, especially in rural areas like Bonner County. She said she was concerned about a trickle-down effect, and that if cuts continue, it will become too much for small providers in rural parts of the state to stay open. 

"It’s eventually going to create a crisis in our field, and I’m not sure what the solution is,” Olson said. “I want to continue to provide support because that’s part of my personality, but if I can’t pay my bills? I have a family to feed; I can’t do this for free.” 

Both Nickerson and Olson said with the news of the cuts, they typically have to put on a facade when helping clients to keep things positive and keeping them on the path to recovery. Nickerson said that was especially tough during his last week as a peer support service provider.

Nickerson said the abrupt change has left him with a lot of uncertainty about finding a new position in the field of social work and that it still doesn't feel real. 

Olson said she remain committed to fighting through those times to continue serving the community. As born and raised Sandpoint resident she said she's seen how the community can rally around a cause to help each other has kept her going. 

“That’s why I continue to do the work, because of the town,” Olson said. “To be able to assist providers, assist clients because they wouldn’t have anything else if we left.” 

The Idaho Department of Health and Welfare responded with a statement on Thursday that reads as follows: 

"The Magellan service and rate cuts are to achieve the required budget holdbacks. The department posted information release MA25-17 on August 22 following the Governor’s Executive Order 2025-05 to address budget stabilization with holdbacks. Following a period of public comment on these changes and a required access analysis the department released information release MA25-19 on October 16.

The department is reducing spending on each managed care contract by 4%. The department and Magellan agree that there are no easy options to achieve the needed budget reductions. Department staff have been working with managed care organizations for the last two months to identify provider rate reductions and changes to optional services, as allowable under the law. The cuts took effect December 1.

Recently Magellan announced the changes following approval from the department.

Here is a list of other services still covered by Magellan: https://magellanofidaho.com/web/magellan-of-idaho/w/covered-services-adults."

The Bonner County Daily Bee reached out to Magellan of Idaho and received no response by the time of publishing.