Maryland officials warn HR1 changes could shrink coverage and federal funding without mitigation

Maryland Department of Health Deputy Secretary Perry Briskin told the Senate Finance Committee on Jan. 29 that federal changes known in the hearing as HR 1 (also referenced as OBA) could cause significant Medicaid coverage loss and reduce federal funding to the state unless the department’s planned implementation work is effective.

Briskin said key HR 1 provisions include an Oct. 1, 2026 change to immigrant eligibility categories that could remove Medicaid coverage for an estimated 15,000 noncitizens; and work‑or‑school reporting requirements for non‑disabled adults (the ACA expansion population) taking effect Jan. 1, 2027. He estimated roughly 115,000 non‑disabled adults could lose coverage not because they are ineligible but because they cannot complete the new reporting and application requirements. The department also plans to shorten retroactive coverage in that group from three months to one month and to move redeterminations for that group from every 12 months to every six months — changes the department said typically increase churn and coverage loss.

Briskin said the state faces an estimated worst‑case loss of up to $2.7 billion in federal funding resulting from these combined provisions, much of which ties to coverage reductions among ACA‑enrolled individuals and to the state’s supplemental financing mechanisms. He told senators the governor’s allowance invests in implementation — system upgrades, staff and communications — and that these investments could materially reduce the net funding loss. "If we can keep most eligible people covered," he said, "that $2.7 billion could reduce to $1 billion or even much less." The department estimated most ACA‑eligible individuals (roughly 90%) would remain eligible with adequate support.

Briskin outlined departmental priorities for 2026: implement HR 1/OBA while protecting coverage through staff and communications investments, execute the AHEAD model with HSCRC, fix home‑and‑community‑based services waiver eligibility processes, and strengthen Carillon operations. He said the state increased MCO rates by 10.7% between 2025 and 2026 and maintains an average profit cap of 1.3% on MCOs; he also stressed MCOs’ role in outreach and implementation activities.

Senators pressed for follow‑up figures and comparisons: whether the governor’s budget offsets the federal funding loss (Briskin said the governor’s investments aim to mitigate the exposure), how Maryland’s per‑enrollee spending compares with nearby jurisdictions (Briskin offered to supply comparative data), and detailed breakdowns of spending for seniors and frequent hospital utilizers (the department offered to provide that data). Briskin repeatedly offered to provide figures for the record on outstanding audit recoveries and other detailed questions raised by senators.

The department said it will continue interagency work with Labor, Human Services and Education to automate eligibility checks and reduce the administrative burden for enrollees, and it asked legislators to consider the tradeoffs inherent in benefit, rate, eligibility and financing decisions that drive Medicaid costs.