Appropriations Committee hears $26 billion overview of Apple Health, exchange and caseload trends

Megan Morris, staff analyst to the Appropriations Committee, told lawmakers the state’s medical assistance programs — branded as Apple Health in Washington — combine Medicaid, CHIP and other specialized programs and together “total $26,000,000,000 in the current biennial budget after the 24 supplemental.”

Morris said the programs covered about 24% of Washington residents last year, including about 46% of children, roughly half of births and 18% of adults ages 19–65. She told the committee that growth since 2014 stemmed from the ACA expansion and the pandemic public health emergency, and that the subsequent end of automatic continuous coverage is expected to reduce caseloads by an estimated 340,000 people from fiscal 2023 to fiscal 2025.

Why it matters: Medical assistance consumes a large portion of the statewide budget and general fund. Morris said Apple Health accounts for about 19% of the statewide $140.9 billion budget and about $5.8 billion — roughly 8% — of general fund state spending in the current biennium, making funding and caseload estimates central to budget deliberations.

Morris outlined how Apple Health is organized and financed. She described three primary eligibility pathways — MAGI categories (families, children, pregnant people and expansion adults), classic “medically needy” pathways for people who are older or disabled, and limited programs for specific populations — and noted that the ACA expansion made many adults under 138% of the federal poverty level eligible. Morris said, “It's the term for a combination of programs and is branded as Apple Health in Washington.”

Morris explained federal matching rules and estimates used in budgeting: a 50% match for core Medicaid services, a higher match (discussed as 90%) for the expansion population and family planning, and a 65% match for CHIP-related expenditures. She described the state’s budgeting process as dependent on caseload forecasts and actuarially certified managed-care per‑capita rates.

On delivery systems and spending, Morris said the state uses both managed care (capitated payments to private plans) and fee‑for‑service, with managed care forecast at about $7 billion in fiscal 2025; hospital and physician costs represent roughly 55% of those managed‑care expenditures, prescription drugs about 26% and administration/taxes about 13%.

Morris summarized recent enacted policy changes the committee should know about: House Bill 1850 (2023) reworked the hospital safety‑net assessment to increase payments to hospitals and draw down federal match; a state “Apple Health look‑alike” program begun July 1, 2024 extends coverage to some adults with immigration statuses that make them ineligible for federal Medicaid (the 2024 supplemental provided about $72 million per year capped to cover roughly 12,000 people); and the state leverages local funds, assessments and intergovernmental transfers to draw additional federal matching dollars.

On the health benefit exchange, Morris said the Exchange’s total biennial budget is about $293 million and that revenue sources include federal Medicaid cost allocation, the exchange’s dedicated account (funded primarily by a 2% premium tax on plans sold through the exchange plus plan assessments), general fund transfers to pay state Medicaid match, and the state affordability account for Cascade Care premium assistance. She said federal and state premium assistance efforts have increased exchange activity and that most people who use the state’s Health Plan Finder to enroll (about 85%) are Medicaid‑eligible, with QHP purchasers making up the remaining 15%.

Morris also reviewed subsidy changes: the American Rescue Plan expanded premium tax credit eligibility in 2021 and the Inflation Reduction Act extended enhanced subsidies through 2025. She said Cascade Care state subsidies began in 2023 for households up to 250% of FPL and that, as of Jan. 1, 2024, those subsidies are available regardless of immigration status for residents under 250% FPL. Morris provided this snapshot: the average monthly premium tax credit in Washington was $429 in 2024 and about 196,000 residents received that support.

Committee members asked follow‑up questions during and after the presentation about projected caseload declines after the end of the public health emergency and about how exchange administrative costs are counted relative to HCA Medicaid totals. Morris offered to follow up with exact figures where she did not have them at the table.

The presentation concluded with members asking for additional detail on certain figures and Morris noting she would provide follow‑ups on the federal match splits and other line‑item amounts.