DLS: Maryland Medicaid FY26 allowance $13.3B; recommends targeted reductions amid federal uncertainty

Anne Braun, a budget analyst with the Department of Legislative Services, told the Health and Social Services Subcommittee on Appropriations that the fiscal 2026 allowance for the Medical Care Programs Administration (Medicaid and MCHIP) is about $13,300,000,000, “just under $270,000,000 less than the fiscal 25 budget,” but noted the fiscal 25 figure included roughly $510,000,000 to cover earlier shortfalls so the fiscal 26 allowance actually represents a slight increase once that is accounted for.

Braun said DLS identified $1,370,000,000 in deficiencies across fiscal 24 and 25 largely tied to higher-than-expected enrollment, utilization and inflation, and recommended a set of deletions and technical amendments to contain costs. Among DLS suggestions were reducing unallocated MCO incentive funds, lowering portions of MCO capitated rates and trimming some proposed provider rate increases.

Why it matters: Medicaid is one of the state’s largest drivers of general fund growth outside K–12 education. Braun told the subcommittee…