Appropriations committee hears that Medicaid health-plan rates left FY2024 $55M short; plans urge book‑closing supplemental

Lansing — On April 16 the Michigan House Appropriations Committee heard testimony that actuarial rate adjustments for fiscal 2024 left the Medicaid health plan services appropriation short roughly $55 million in general fund (about $250 million total), and that midyear retroactive rate changes and rising pharmacy, dental and acuity costs drove the shortfall.

“My name is Dominic Pallone. I’m the executive director of the Michigan Association of Health Plans,” Pallone told the committee as he outlined how the state’s rate‑setting and budget calendar can produce gaps between authorized appropriations and actuarially sound rates. Pallone said waiting for complete claims data before finalizing rates is standard practice but can produce under‑authorization when experience differs from projections.

The testimony framed the shortfall as a timing and experience problem rather than a single policy error. Pallone walked the committee through the fiscal‑year 2024 timeline: the fiscal‑year omnibus appropriation (PA 119 of 2023) originally built in funding to cover up to a 2.5% actuarial adjustment; finalized rates issued before Oct. 1 called for a composite increase of 3.8%; a six‑month prospective adjustment filed in…