Medicaid funding and eligibility rules would change statewide

The Department of Health and Human Services would receive additional recurring Medicaid funds and other funds for managed-care contracts. The funds would go to the Division of Health Benefits for Medicaid funding adjustments and managed-care operations. The funding would account for projected changes in enrollment, enrollment mix, service and capitation costs, federal matching rates, and the Children and Families Specialty Plan. The funds would be used for contracts needed to operate the state's Medicaid managed-care program. The recurring funds would begin with the 2025-2026 fiscal year and apply through the 2025-2027 fiscal biennium.

The Department of Health and Human Services would stop Medicaid coverage for obesity-management medications. The provision covers obesity-management medications whose Medicaid coverage began August 1, 2024, but not GLP-1 medications used by beneficiaries to manage diabetes. Medicaid funds would be reduced by $34 million in recurring funds and associated receipts beginning with the 2025-2026 fiscal year. The provision would follow the policy that applied before August 1, 2024. The coverage change would take effect October 1, 2025.

County social-services departments would have to meet Medicaid processing-time and accuracy standards, and the state could temporarily take over eligibility work after repeated failures. The rules would cover Medicaid applications, eligibility renewals, and county departments of social services; they would also apply to federally recognized tribes that run Medicaid under state law. Counties generally would have 45 days to decide applications, or 90 days when a disability decision is involved. Repeated failure to meet processing or accuracy standards would require a corrective action plan. The state would give at least 90 days' notice before a temporary takeover, and the county would have a right to appeal. During a takeover, the county would continue paying its nonfederal share and additional costs tied to the required standards. The accuracy-audit provision would take effect January 1, 2027; other provisions in this section would take effect when the act becomes law, unless another date applies.