Medicaid leaders flag $85 million in state requests and caution on federal policy risk; Nemours, 1115 waiver noted
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Summary
DMMA described its FY2026 funding needs, an $85.5 million state request to cover FMAP shifts, MCO pricing increases, long‑term services growth and new benefits. The division described a planned Nemours pediatric global budget and an approved Section 1115 waiver authorizing postpartum supports including diapers.
The Division of Medicaid and Medical Assistance (DMMA) briefed the Joint Finance Committee on May 20 about the division's FY2026 request and program developments.
Major fiscal items - State request: DMMA cited an $85,500,000 state dollar request for FY2026 to address federal match changes, managed‑care organization (MCO) rate adjustments, long‑term services and supports growth, Medicare premium increases and new benefit implementations. - Hospital provider assessment: The governor's recommendation assumes collection of approximately $40 million via a hospital provider assessment established under Senate Bill 13. DMMA said the assessment revenue is intended to be reinvested in Medicaid and hospital services after federal approval and in line with statutory requirements.
Program and policy developments - 1115 waiver: DMMA secured approval for a Section 1115 waiver from CMS to authorize several innovations, including a 12‑week postpartum supplemental nutrition pilot that provides diapers and support services; the department reported roughly 300 members used the diaper benefit in the first quarter of its pilot. - Nemours pediatric global budget: DMMA described a planned first‑in‑the‑nation pediatric global budget with Nemours Children's Health that will move care for Medicaid children toward a fixed global payment to encourage whole‑child care and population health management.
Federal policy risk DMMA repeatedly warned the committee that several federal proposals under consideration could shift costs to the state (caps, FMAP reductions for certain populations, narrower provider‑tax rules). DMMA provided a sensitivity estimate: a 1 percent reduction in the 90% match for the ACA expansion population implies roughly a $6.8 million state share increase; a move from 90% to a state base FMAP would be substantially larger (DMMA estimated hundreds of millions in total program exposure depending on the scenario).
Takeaway: DMMA framed its FY2026 request as necessary to maintain current services amid price and caseload growth and asked the committee to weigh investments carefully while federal rules remain unsettled.