With his first proposed budget, Governor Shapiro has provided a spending plan for Fiscal Year 2023-24 that would maintain existing Medicaid service and eligibility levels. Despite the Commonwealth having a record budget surplus of nearly $8 billion dollars when he inherited office, the Governor largely chose to continue pandemic-era programs – like universal school breakfast and increased direct care worker rates in Medicaid – rather than to propose expansive new initiatives.
The Governor’s budget assumes a Medicaid enrollment decline in the upcoming fiscal year of approximately 200,000 individuals due to the end of the Medicaid continuous coverage requirements. Major Medicaid cost drivers include the phase-out of the enhanced federal match tied to the continuous coverage protections and an increase in the state’s base federal match rate (FMAP) from 52% to 54.12% effective October 2023.
The Governor proposes a general fund budget of $44.4 billion for FY 2023-24. This would be an increase of $3.3 billion (8%) over the current fiscal year budget revised for recommended reductions. For the Department of Human Services (DHS), the budget proposes a general fund budget of $19.1 billion and a total budget of $56.9 billion, which includes both federal and state funds. The total budget would represent an increase of $1.18 billion (2.1%) from the current fiscal year.
The Medical Assistance appropriation is proposed at $28.8 billion, of which $18.5 billion (64%) is federal funds, $6.8 billion (24%) is state funds, and $3.5 billion (12%) is provider assessments and other augmentations. This would be an increase of 1.6% from the current fiscal year. Of the overall MA budget, $23.2 billion is allocated for capitation payments to the Medicaid managed care organizations (including both PH and BH HealthChoices).
The Long-Term Living appropriation is proposed at $15 billion, of which $8.3 billion (55%) is federal funds, $5.5 billion (37%) is state funds, and $1.2 billion (8%) is provider assessments and other augmentations. This would be an increase of 1.5% from the current fiscal year. The Community HealthChoices appropriation ($13.9 billion) comprises the vast majority of the Long-Term Living budget.
Initiatives included in the proposed Human Services and Medicaid budgets include:
- Maintaining Direct Care Worker Rate Increases – $35.5 million is provided to maintain the eight percent (8%) Personal Assistance Service rate increase in CHC that had been temporarily funded through the federal American Rescue Plan Act.
- Expanding Intellectual Disability & Autism Services – $17.5 million is provided to serve an additional 750 people in the Community Living Waiver and an additional 100 people in the Consolidated Waiver.
- Expanding County-Level Mental Health Services – $20 million is provided to improve the county-based infrastructure for providing MH and drug and alcohol treatment services.
- Expanding School-Based Mental Health Services – $100 million is provided to the school-based block grant to improve mental health resources for school students and staff.
- Supporting the new 988 Suicide & Crisis Lifeline – $5 million in one-time funding is provided to build call center infrastructure and 2.75% of 911 surcharges is proposed as on-going dedicated funding to sustain the 988 Lifeline.
- Expanding Services for Older Adults – $10 million is provided to reduce waitlists for the OPTIONS program, which helps seniors to stay in their homes, and to help Area Agencies on Aging attract providers and retain staff.
View the complete 2023-2024 proposed budget here.