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LFA stress test: FMAP shifts and recessions could put hundreds of millions at risk for traditional Medicaid

Executive Appropriations Committee · November 18, 2025
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Summary

LFA modeled economic and federal policy scenarios and estimated combined revenue and Medicaid expenditure risk between $387.5 million and $862.1 million over five years; findings show the ACA (expansion) population could be covered by the Medicaid ACA Fund but the traditional Medicaid program would likely exceed the stabilization account without additional buffers or policy changes.

The Legislative Fiscal Analyst Office told the Executive Appropriations Committee that changes in federal Medicaid participation (FMAP) and recession scenarios could expose Utah to hundreds of millions in budget risk over the next five years.

Noah Hanson, LFA staff economist, outlined stress testing based on four Moody Analytics economic scenarios (baseline, moderate recession, severe recession, stagflation) and two FMAP policy shocks: a 5% downward shift and an extreme 50/50 split of federal/state responsibility. He described the methodology — scenario‑driven enrollment forecasts, PMPM inflation using medical CPI, and extrapolation over a…

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