Assembly advances health‑budget implementation bill as members press for Medicaid details

The Assembly advanced a health and mental‑hygiene implementing bill after hours of questions from lawmakers about Medicaid financing and program changes. Sponsor and Ways and Means chair Gary Pratlow said the bill includes measures to implement enacted budget decisions on Medicaid, extend the Medicaid global cap with an 8% increase in relevant allocations, and fund targeted increases for hospitals, nursing homes and human‑service wage adjustments.

Members repeatedly sought clarity on the size and composition of Medicaid spending. Pratlow told the chamber total Medicaid spending across state agencies is $117,787,882,000, with roughly $74,100,000,000 in federal funds and a state general‑fund share of about $32,000,965,000. He said the enacted budget remains inside the global cap and that changes do not shift new spending outside the cap.

Lawmakers pressed the sponsor on the fate of the Essential Plan and related federal waivers. Pratlow said the state will terminate its 1332 waiver, reactivate the older 1331 basic health plan effective July 1, 2026, and access roughly $9 billion from the basic health plan trust to preserve coverage for many enrollees. He warned that reactivation will leave about 470,000 people with incomes roughly between 200–250% of the federal poverty level ineligible for the Essential Plan.

Members also drilled into the bill's new managed‑care organization (MCO) assessment: a 0.35% premium‑revenue assessment beginning January 2027. Pratlow said the assessment is expected to net $165 million in fiscal year 2027–28 and that reinvestments from the health‑care stability fund will include $711 million for hospitals, $451 million for nursing homes and related providers, $330 million for safety‑net transformation, and $500 million to offset the global‑cap effect — a total reinvestment package of about $1.47 billion.

Several members welcomed the enacted 2.7% targeted inflationary increase for human‑service providers (up from a 1.7% executive proposal) while warning reporting and accountability are needed to show how the money is spent. “They have to submit a written certification attesting the funding we use to first promote recruitment and retention of direct‑care staff prior to any executive compensation increases,” a member said, urging public transparency on how much of the $120 million per percentage point is going to wages versus other uses.

Pratlow said several policy issues remain to be finalized outside the budget text; for example, integrated behavioral‑health licensing was removed from the budget and will be enacted as a stand‑alone measure.

The clerk recorded the vote on the rules report tied to the health implementing bill as Aye 101, Nays 41; the bill passed. The measure takes effect immediately as provided in the implementing language.