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LFC previews FY27 requests for DOH, HCA and CYFD; federal Medicaid and SNAP changes loom large
Summary
LFC briefed lawmakers on FY27 budget requests: DOH seeks a roughly $4 million general fund increase tied to facilities and operational costs, HCA projects funding shifts as federal directed payments and provider taxes phase down and anticipates enrollment drops tied to Medicaid work requirements, and CYFD seeks sizable general fund backfills and GROW operating requests.
The Legislative Finance Committee presented FY27 budget previews for the Department of Health, the Health Care Authority and the Children, Youth and Families Department, emphasizing federal policy drivers and agency-specific cost pressures.
Emily Hilla (LFC fiscal analyst) said the Department of Health submitted a $685.8 million FY27 operating request (a 14.9% increase), with a $4.0 million general fund increase Hilla highlighted for committee review. She said facility-related contractual services accounted for much of the facilities program increase and pointed to recent facility census gains that have supported additional Medicaid revenue.
Eric Senne (LFC) framed the Health Care Authority budget in the context of federal reconciliation and other national changes: the phase-down of state-directed payments and provider taxes will reduce supplemental Medicaid revenue that previously supported hospital directed payments; the reconciliation language also creates community engagement (work requirement) provisions for Medicaid expansion adults expected to begin implementation on 12/31/2026 and projected to reduce Medicaid enrollment by tens of thousands. "We're expecting about 83,000 individuals to roll off because of those Medicaid changes," Senne said, and LFC modeled a substantial near-term reduction in Medicaid spending tied to expected enrollment declines.
Senne also described SNAP and reconciliation impacts: a change in the federal match for administrative costs will shift a larger share of SNAP admin to states (25% federal / 75% state share in the new rules) and several eligibility and work-related changes are expected. He identified a roughly $24 million state exposure for SNAP administration under the new match rules and noted the HCA received special-session appropriations (~$116 million) this year that altered the FY27 request profile.
Dr. Carly Malone (LFC) previewed CYFD's FY27 operating request, noting a roughly $25.1 million agency-wide increase and large general fund backfills to replace lower-than-expected federal realization (title IV-E reimbursements). She said CYFD also submitted significant GROW requests for recurring operational needs that members questioned as potentially inconsistent with GROW—s pilot purpose.
Throughout the preview, legislators requested specific breakout data (e.g., which federal funds drive DOH increases, snapshots of CARA cases, and details of foster-family recruitment spending). LFC committed to providing follow-ups and dashboard links so the committee can inspect program-level spending and outcome reporting ahead of formal budget deliberations.
