Audio recording is automated for accessibility. Humans wrote and edited the story. With federal pandemic relief dollars that for years bolstered Mississippi Division of Medicaid’s budget now depleted, state lawmakers are grappling with a steep budget increase request from the agency. Lawmaker s have been stunned by the agency’s request for a significant increase from last year and baffled by budget requests made by the agency and governor’s office, which differ by tens of millions of dollars. The agency, which accounted for roughly a tenth of state spending this fiscal year and administers health coverage to nearly 700,000 children and low-income pregnant, disabled and elderly Mississippians, has requested a nearly $390-million increase in state funding over the current year, despite the program’s enrollment dropping to the lowest level in over a decade.  “This is a humongous amount of money, ” House Medicaid Chairwoman Missy McGee, a Republican from Hattiesburg, said at a January budget hearing.  Lawmakers have struggled to settle on a figure, in part because of a roughly $160-million discrepancy between the agency’s current request and a November budget proposal from Gov. Tate Reeves, whose office oversees the Division of Medicaid. “That is a considerable difference from virtually within the same office,” McGee said in January before posing a slew of questions to agency leaders. “We feel like we have an obligation to dig in and understand.” And, Medicaid’s request has grown since the fall, when state agencies made initial budget requests. Officials’ January request of $1.36 billion was about $45 million higher than the request it made in August, following a routine actuarial report. These periodic reports are used to forecast Medicaid’s fluctuating costs. State legislators sent the agency’s funding bill to final negotiations between the chambers Wednesday, indicating that they have not yet reached a decision on the Medicaid budget.  The Division of Medicaid and the governor’s office did not respond to Mississippi Today’s request for comment.  Lawmakers seek ‘solid number’ In recent years, state lawmakers granted Medicaid marginal funding increases as the agency relied on a reserve of funds leftover from the COVID-19 pandemic to balance its budget. But with the surplus now exhausted, agency officials say a significant boost in state appropriations is necessary to maintain services at the same level.  Senate leaders appear more willing to grant the agency’s budget request, but they have acknowledged that they are trying to pin the agency’s leaders down for a specific, final dollar figure. “Numbers have fluctuated, so we’re trying to get them to give us a solid number,” Senate Medicaid Chairman Kevin Blackwell said of the agency.  The two legislative chambers seem far apart on how much state money they are willing to spend on the agency. The House’s initial budget proposal would spend roughly $969 million in state money on the agency, a figure close to last year’s appropriation. The Senate proposed spending $1.07 billion — roughly $100 million more than last year but still about $290 million under the agency’s request.  Senate Appropriations Chairman Briggs Hopson said the initial appropriations bill he passed for the agency was a placeholder measure, but he anticipates that the amount of state dollars going to Medicaid’s budget this year will increase. “In the 19 years I’ve been here, I’ve been involved in some capacity with working on the Division of Medicaid’s budget,” Hopson said. “And it’s hard for the Medicaid director to know the exact amount that Medicaid needs.”  He said the division has largely been responsive to his questions about the budget, but he “still wants a little more detail” from them on their final request. “The first number they gave us, frankly, was a little high,” Hopson said. The lack of consensus on one of the state’s largest budget items, with roughly three weeks left in the legislative session, puts lawmakers in a challenging position, especially amid an ongoing, contentious debate over teacher pay raises and funding the state’s public pension system, while the state is phasing out its income tax.  Cindy Bradshaw, executive director of the Mississippi Division of Medicaid, listens during a meeting of the Medicaid Advisory Committee at the Sillers Building, Friday, July 25, 2025, in Jackson. Credit: Vickie D. King/Mississippi Today Cindy Bradshaw, the executive director of Mississippi Medicaid, has warned that underfunding the agency could force it to cut payments to providers.  “We can certainly control the budget if we need to,” she told members of the House appropriations committee in January. “But it’s not going to come without there being a reduction of what we reimburse to the providers. And nobody wants to reduce what we pay to the providers.”  Richard Roberson, president and CEO of the Mississippi Hospital Association, said Bradshaw informed him cuts to provider payments could be as high as 11%, though she did not describe how the figure was calculated or how it would be applied.  Roberson said he is hopeful that Medicaid won’t be forced to make those cuts, but he also wants lawmakers to remain mindful of the budget’s impact on state taxpayers. “Somewhere there is a solution that balances the needs of taxpayers to have a fiscally conservative program, but to make sure that providers can pay for the increasing cost of care,” Roberson said. “It’s a tight rope to walk between what the state can afford to pay and caring for high-acuity level patients.”  And cuts to provider payments would not only impact doctors, but also patients and particularly children, over half of whom are covered by Medicaid, said Dr. Patricia Tibbs, the president of the Mississippi chapter of the American Academy of Pediatrics.  Doctors could stop accepting Medicaid patients or be forced to close their practices if payment rates fall, exacerbating existing physician shortages and care gaps, she said. And cuts to benefits could have drastic consequences for children’s development.  “Any cuts to Medicaid will really affect children’s care,” Tibbs said.  A looming cliff The Division of Medicaid has warned legislators for years that a significant budget increase was on the horizon. During a September 2024 budget hearing, Drew Snyder, the former state Medicaid director, told lawmakers they would be forced to make difficult decisions about program spending in coming years.  “Since the end of the public health emergency was announced in late 2022, we’ve been bracing for a dramatic increase in state spending, and there is catch-up coming,” said Snyder, who left the agency in October 2024.  During the pandemic, the federal government provided an enhanced match for state Medicaid funding in exchange for states keeping individuals enrolled during the emergency. As a result, Medicaid’s cash balance soared to $682 million in 2023, according to agency documents.  States were required to resume normal eligibility determinations in 2023. As the enhanced federal funding ended and states were once again allowed to remove ineligible participants from their rolls, Mississippi’s enrollment declined sharply, falling by over 185,000 beneficiaries in the year following its June 2023 peak, and continuing since then.  Snyder told Mississippi Today on Wednesday he was not surprised by the agency’s budget request for the upcoming fiscal year.  “Honestly, we were projecting in early 2024 larger numbers than that,” he said, noting that the numbers may be lower than earlier projections because Medicaid enrollment has fallen. In addition to spending surplus funds, Medicaid has been facing rising costs for nursing home care and home- and community-based waiver programs, which allow Medicaid beneficiaries to receive long-term care in their homes or communities rather than in institutions, Bradshaw told lawmakers during budget hearings.  Last year, the Division of Medicaid requested a $160 million increase from the Legislature in anticipation of expiring federal funds, but lawmakers approved only about $60 million. When the surplus fund was depleted during the current fiscal year, legislators advanced a measure to give the agency a $35 million deficit appropriation to cover the current shortfall. This has not yet been approved by state lawmakers.  Agency leaders said in September the Division of Medicaid has stalled planned rate increases and cut back on spending in anticipation of the pending deficit.  Other states also received enhanced federal funding for Medicaid, but, to his knowledge, others are not facing the same funding cliff, said Edwin Park, a research professor who studies Medicaid policy and teaches at the Georgetown University McCourt School of Public Policy. Devoting the money to a reserve is “better than what some states may have done,” he added, such as using the money to bolster their general funds. Roberson said he also was not aware of other states facing the possibility of a similar budget increase dilemma that could lead to cuts for providers.  Park said state Medicaid programs can cover budget shortfalls by increasing taxes or making cuts to provider payments, benefits or eligibility. In the past, state Medicaid programs have increased provider taxes, which are used to draw down federal matching funds, to cover shortfalls, Park said. But increasing the taxes is no longer an option after Congress passed the One Big Beautiful Bill Act in July, which freezes states’ existing tax rates.  These budgetary pressures will only worsen under the gradual reduction in supplemental payments to hospitals, which bolster low Medicaid payments and will start to be phased out in 2028, Parks added. “There’s nothing else on the horizon that is going to give the state any relief from a budget perspective,” Roberson said.  Lawmakers have until March 28 to file their first negotiated budget proposal for Medicaid.  ...read more read less