The Health Care Authority (HCA) is requesting $8.847 billion from the general fund–state (GFS) for 2025–27. That is an increase of $724.6 million (8.9%) over enacted 2023–25 appropriations. Of the increase, $90.9 million is carry-forward, $180.6 million is maintenance, and $477.0 million is new policy. (See the box at the bottom of this post for budget and fund terminology.)

The maintenance level request is so small because the HCA (which administers Medicaid, among other health programs) does not incorporate the June caseload forecast. Instead, they have placeholder requests until the November caseload forecast. The largest item in the maintenance level request is $142.0 million to restore assumed savings from Medicaid program integrity activities. As the request notes, the Legislature first booked savings from such activities in the 2019–21 budget. However, actual savings have not met the target. The budgets adopted since then have appropriated funds for the HCA to restore the assumed savings. (Note, though, that those appropriations have been classified in the final budgets as policy level.)

Major new policy proposals from the HCA include:

• $84.3 million in 2025–27 and $121.3 million in 2027–29 to expand health care coverage for uninsured adults who are ineligible for Medicaid because of their immigration status. Since 2022, the Legislature has appropriated $82.1 million for this purpose. According to the budget request, 11,936 individuals have enrolled in the program. The request proposes increasing funding to accommodate an additional 4,000 in FY 2026 and 10,000 in FY 2027.
• $70.9 million in 2025–27 and $94.5 million in 2027–29 to increase reimbursements to tribal facilities that provide substance use disorder services to non-native Medicaid clients. According to the request, the HCA currently only pays Indian Health Services the federal share for these clients, but the state must pay the non-federal share with state (not tribal) funds to comply with federal policy.
• $68.4 million in 2025–27 and $91.2 million in 2027–29 to increase Medicaid rates for primary care providers to the Medicare rate level.
• $75.4 million in 2025–27 and $82.1 million in 2027–29 for an electronic health record service, to be utilized by the HCA, Department of Corrections, and Department of Social and Health Services.

Another new policy request is not included in the agency’s GFS total, but it would require appropriations from the GFS. In 2021, the Legislature adopted E2SSB 5377, which established the state health care affordability account and a premium assistance program. Individuals purchasing insurance through the Health Benefit Exchange are eligible for state premium assistance if their income is up to 250% of the federal poverty level.

The HCA is requesting $95.0 million in 2025–27 and $140.0 million in 2027–29 from the state health care affordability account to continue the program. However, there is no tax source for the account; instead, it relies on appropriations from the GFS. Consequently, this request would have a GFS impact. (The Legislature has appropriated $155.0 million from the GFS to the state health care affordability account to date. In turn, the state appropriated $11.6 million in 2021–23 and $125.0 million in 2023–25 from the state health care affordability account for the premium assistance program.)

(Previous posts on 2025–27 agency requests are here. Our reports on the projected 2025–27 budget shortfall are here and here.)