State lawmakers approved roughly $200 million in additional funding for Medicaid for the coming fiscal year — about half of what the Division of Medicaid requested — and advanced a $35 million deficit appropriation for the current fiscal year, lawmakers said Sunday.
Senate Appropriations Chairman Briggs Hopson, a Republican from Vicksburg, warned of a “very real possibility” there could be a deficit appropriation next year as well, lawmakers said. House Appropriations Chairman Clay Deweese, a Republican from Oxford, told the House floor the steep increase in Medicaid spending has squeezed other parts of the state’s $7.36 billion budget, including an overdue teacher pay raise and funding for child care.
Lawmakers proposed $1.17 billion in state spending on Medicaid, about $190 million less than the agency’s January budget request and roughly $29 million below Gov. Tate Reeves’ recommendation, lawmakers said. Lawmakers said the appropriation bill will next go to Reeves for consideration.
Lawmakers said they were surprised by the agency’s request for a nearly $390 million increase over the current year, even as program enrollment dropped to the lowest level in more than a decade. Agency leaders told lawmakers the sharp increase resulted from a reserve of federal pandemic relief funds running out. Agency budget documents show Medicaid’s cash reserve rose to $682 million in 2023 during the pandemic.
To continue current services, lawmakers said they recommended an additional $120 million from the state’s general fund compared with last year, including $20 million to offset reduced funding from the Health Care Expendable Fund and $100 million from the state’s capital expense fund. Hopson told colleagues he hopes capital expense dollars will be sufficient but said Medicaid’s budget is difficult to predict.
Hopson told Mississippi Today that it was unclear whether the agency would need to freeze or cut provider reimbursement rates. Mississippi Medicaid Director Cindy Bradshaw previously warned stakeholders the agency could lower provider payments by as much as 11% without an increase in the budget, and Matt Westerfield, a Medicaid spokesperson, did not respond to Mississippi Today’s request for comment, lawmakers said. Hopson also said Mississippi’s federal match rate will rise to 77.32% for the coming fiscal year. Lawmakers warned the same challenges could return next year, and Deweese said the Legislature will call a study committee on Medicaid’s budget this summer.
