DHSS outlines FY27 budget as FMAP shift forces trade-offs in services and staffing

The Missouri Department of Health and Senior Services presented its proposed fiscal year 2027 budget to the House committee, flagging a projected federal match cut that will shift costs to state general revenue and require core operating reductions.

Director Sarah Wilson told the committee the department’s $2.2 billion budget is heavily federal — about 69% — and that home and community‑based services for seniors and people with disabilities account for roughly 80% of the general revenue the agency receives. "The proposed fiscal year 27 budget reflects a deliberate effort to steward Missouri's fiscal resources responsibly in the face of ongoing economic pressures," Wilson said, framing the requested package as a set of difficult trade‑offs to preserve essential public‑health functions.

Budget director Maddie Starnes outlined a new decision item to cover an expected decline in the blended and enhanced Federal Medical Assistance Percentage beginning Oct. 1, 2026, which would shift Medicaid‑related costs to state funds. Starnes said the governor recommended additional appropriation authority and corresponding core reductions elsewhere in the agency to offset that change. "Beginning on 10/01/2026, the blended and enhanced FMAP rates will decrease," she said, adding that the change "will result in a net cost shift from federal to general revenue for our department."

Lawmakers pressed department leaders about recurring lapses and unexpended authority in federal and other funds, asking whether general revenue would be used only after exhausting other sources. Chad Ritter, the department’s director of administration, said the practice is to use federal funds first and treat general revenue as the last dollar. He told members many lapses reflect pandemic and ARPA timing and program‑priority decisions, not discretionary withholding of GR.

Committee members also asked for additional detail on vacancies, the number of open FTEs and funding authorities that have been unused in recent years. The department agreed to provide supplemental detail and line‑item breakdowns to the committee.

The committee recessed with several follow‑ups pending; the department will return materials on lapses, FTE vacancies and other clarifications requested during questioning.