DVHA requests $1.26 billion for FY26 as caseload, Medicare-savings changes raise costs

The Department of Vermont Health Access asked the House Appropriations Committee on Feb. 12 for a FY26 appropriation of about $1.2597 billion, citing an estimated $46.1 million increase for caseload and utilization across Medicaid programs and the partial-year cost of a congressionally enacted Medicaid policy change set to take effect in January 2026.

The budget presentation, delivered by Deshaun Burrows, commissioner of the Department of Vermont Health Access, and Stephanie Barrett, the agency’s chief financial officer, said the $46.1 million caseload and utilization increase reflects consensus estimates developed with the Agency of Human Services central office, the Joint Fiscal Office and the Department of Financial Management. “That caseload and utilization is the result of the consensus process,” Burrows said during testimony.

Why it matters: the global-commitment Medicaid line is the largest part of the DVHA budget. Small percentage shifts in utilization or cost per case translate into large dollars at the state level. Committee members pressed DVHA on how federal policy uncertainty could affect the projection.

Key details and supporting items presented to the committee: - Total DVHA FY26 request: roughly $1,259,700,000 gross (administration and programmatic lines combined). The administration portion was discussed at about $182 million in the presentation. - Caseload and utilization increase: $46,100,000 gross across global commitment, state-only and non-waiver lines; DVHA staff described this as the baseline change required to maintain current services and pricing. - Medicare Savings Program (MSP) expansion: the agency is implementing a change that raises eligibility thresholds (qualified individuals to 195% of the federal poverty level) and will begin in January 2026. DVHA estimated a net state-general-fund impact in the budget materials (partial-year cost reflected in FY26). DVHA staff said outreach and take-up assumptions informed the fiscal estimate. - One-time bridge funding: DVHA included a $10,800,000 global-commitment one-time appropriation for calendar year 2026 to replace certain payments that previously flowed from a Medicare ACO to programs such as SASH and Blueprint until the AHEAD cohort 2 decision in 2027. - Graduate medical education: DVHA requested additional spending authority of $7,250,000 tied to federal formulas; DVHA said the state match for that item is provided by the University of Vermont, not the general fund. - Administrative and contractual changes: DVHA moved an existing Vermont Legal Aid contract into its administrative base (no net programmatic change) and noted higher costs on several IT and vendor contracts.

Context and process notes: DVHA officials said the caseload and utilization figure was set through the consensus process used each fall with central office and fiscal staff and does not assume programmatic rate changes. Stephanie Barrett described how some appropriations are annualized from midyear policy changes, for example hospice and FQHC indexing previously enacted in 2025.

Committee members asked DVHA about contingency planning for potential federal policy changes that could affect Medicaid financing. “We are thinking about it,” Burrows said, noting the agency is monitoring congressional proposals and working with associations and academics on modeling. Staff cautioned that many proposals remain hypothetical and that precise modeling requires clearer federal proposals.

Ending: The committee did not take a vote on DVHA’s request at the Feb. 12 hearing; members said they would continue review and follow up with agency staff and the committee liaison. DVHA said it would return metrics on specific new initiatives, such as the justice reentry case-management program, as those programs begin operations.