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Appropriations subcommittee presses Health Care Authority on $126 million request, FMAP stability
Summary
Senate appropriators questioned the Health Care Authority’s $126 million agency request and discussed contingency plans tied to federal FMAP changes and the agency’s cash reserves, including a near-$600 million FMAP stabilization fund.
Senate appropriators on the Appropriations subcommittee questioned the Health Care Authority’s $126,000,000 agency request and drilled into contingency plans tied to a possible federal FMAP (Federal Medical Assistance Percentage) reconciliation and related cash-flow risks.
The discussion centered on three funding drivers listed by subcommittee members: adjustments tied to expected FMAP reductions, program growth and utilization, and declining tobacco-tax revenue that affects the authority’s receipts. Senator Racino, presenting the subcommittee’s review, said the subcommittee is “taking a very hard look at those numbers” to ensure items are necessary before advancing them.
Minority Leader Kurt asked how long the Medicaid system could sustain an operational freeze like the one experienced recently. Racino said the authority had been communicating with federal and agency officials during that temporary portal outage and that the subcommittee had asked the authority not to deposit an approximately $100,000,000 transfer into the FMAP stabilization fund so those dollars could be used to reduce the current $126,000,000 request, bringing it closer to $26,000,000.
Senator Hicks pressed for specifics about the federal match on expansion populations, noting prior reliance on a 90/10 federal-state split. Racino warned that any permanent reduction below the current 90/10 federal match could cost the state “hundreds of millions of dollars” and said he had been communicating with the congressional delegation about reconciliation developments in Washington.
Subcommittee members also heard that the authority’s FMAP stabilization fund holds roughly $600,000,000, and that one identified mitigation step was postponing a roughly $100,000,000 deposit into that fund to help cover near-term needs. The committee did not take formal action; members asked for follow-up details and documentation from agency staff.
The subcommittee is continuing oversight of Medicaid-related requests and asked the Health Care Authority and staff to provide more detailed cash-flow scenarios and contingency plans for different FMAP outcomes.
