Mississippi’s Medicaid agency has asked state lawmakers for nearly $390 million in additional funding after federal pandemic relief dollars were exhausted, according to sources familiar with the request.
The agency, which serves nearly 700,000 low-income residents, including children, pregnant women, the disabled, and elderly, has seen its enrollment decline to the lowest level in more than a decade. Despite this, officials argue that a substantial budget increase is necessary to maintain current services, especially as surplus pandemic funds have been depleted.
Lawmakers expressed surprise and concern over the size of the request, which is substantially higher than previous proposals. The agency has requested about $1.36 billion for the upcoming fiscal year, marking an increase of roughly $45 million from August. However, the governor’s office has proposed a lower budget of about $969 million, leading to a roughly $160 million discrepancy between the two requests, according to sources.
Legislators are still negotiating the final budget, with some leaders signaling support for a larger appropriation. Senate Medicaid Chairman Kevin Blackwell said lawmakers are seeking a definitive figure from the agency to facilitate decision-making. Meanwhile, Senate Appropriations Chairman Briggs Hopson described the initial budget proposal as a placeholder, emphasizing the need for more detailed information from Medicaid officials.
Funding disagreements come as the state faces competing priorities, including teacher pay raises, pension funding, and phasing out income taxes. Medicaid Director Cindy Bradshaw warned that underfunding could lead to reduced payments to providers, potentially affecting access to care for vulnerable populations, including children. Hospital leaders also expressed concern about possible cuts to provider reimbursements, which could negatively impact patient care and exacerbate physician shortages.
Medicaid officials have long warned of looming budget increases. During a September 2024 hearing, former Medicaid Director Drew Snyder forecasted that the end of federal pandemic aid and the resumption of normal eligibility determinations would lead to increased state spending. Since federal support ended, Medicaid enrollment has dropped by more than 185,000 beneficiaries, reducing costs but also complicating budget planning.
State officials are exploring options to cover shortfalls, including potential tax increases or cuts to benefits and provider payments. However, recent federal legislation has limited states’ ability to increase provider taxes, complicating efforts to fill budget gaps. With lawmakers given until March 28 to finalize the Medicaid budget, the coming weeks will be critical for resolving these funding challenges.
