The proposed bill introduces a new chapter, Chapter 25, to Title 56 of the Idaho Code, titled the "Merit-Based Health Care Act." This legislation aims to ensure that employment and contracting decisions within the Medicaid program are based on individual merit and qualifications, while prohibiting discriminatory hiring practices and the use of state Medicaid funds to support ideological or discriminatory employment practices. The bill outlines definitions for terms such as "discriminatory hiring" and "prohibited DEI conduct," and establishes provisions regarding Medicaid contractual compliance, enforcement, and penalties for violations.

Additionally, the bill grants a limited private right of action for health care professionals who face retaliation for refusing to engage in prohibited DEI conduct. It specifies penalties for health care providers based on the number of employees, with escalating fines for repeated violations. The legislation also includes a savings clause to ensure compliance with federal civil rights laws and acknowledges that any conflicting provisions may be severed while allowing the remainder of the chapter to remain effective. An emergency clause is included, making the act effective on July 1, 2026.