Lawmakers probe Medicaid trust fund as balance declines to roughly $394M for seven months

Lawmakers pressed state officials on the trajectory of the Medicaid trust fund after department leaders reported the balance has declined from prior highs to roughly $394 million for the seven months ended in the current fiscal year.

Senator Hickey summarized the concern, citing earlier balances and asking whether current trends will leave a particular year-end balance. Jane McMahon, DHS secretary, and Jim Adson, secretary of the Department of Finance and Administration, said they run projections and track claims weekly. Adson said the departments are "currently running, with our AOP to not have any alarms on the budget," and noted that spending tends to be higher in the fourth quarter. Officials identified a $100,000,000 set-aside in the trust fund dedicated to Medicaid that has not been touched.

Lawmakers asked how outstanding rule implementations from the last legislative session could affect spending. Adson said more than 10 outstanding rules remain under review with CMS and until CMS responds the fiscal impact is hard to finalize. Members also asked whether the trust fund will require additional capital and whether a target year-end balance exists; officials said no recommended target had been set and that any decision on a target would occur during the budget process.

Committee members and staff discussed that federal funds coming into the state and programs funded through recent legislation could change the trajectory, but officials cautioned that federal monies cannot be used to supplant existing appropriations and must be used for outcomes and new initiatives. The committee concluded the report and adjourned.