SALT LAKE CITY — The Utah Department of Health & Human Services confirmed to FOX 13 News it has documented a $100-200 million budget shortfall in its Medicaid program.
"The deficit is significant," Health & Human Services Commissioner Tracy Gruber told FOX 13 News in an interview Tuesday. "We want to reiterate that at this point, there have been no changes to Medicaid benefits and people should feel comfortable using Medicaid."
But the budget gap is so big, the Utah State Legislature is likely to dip into rainy day funds to bail it out. The shortfall is a result of a series of factors: a lot of people were dropped off Medicaid as the COVID-19 public health emergency ended; health care costs have only increased since then; and a budget forecasting tool utilized by the Utah Department of Health & Human Services didn't catch it.
"We did lose about 200,000 members in our Medicaid membership rolls after the public health emergency ended. So the question would be, if you lose that number of people, why would it cost so much? The people who remained on medicaid are what we would call 'high utilizers,'" Gruber said.
There are about 318,000 Utahns on Medicaid rolls currently, according to DHHS. The total budget for Medicaid is about $5.6 billion in Utah with most of that federally covered. Utah's share is about $500 million, so a $100-200 million shortfall is big.
Medicaid is a highly-scrutinized program politically. Asked how DHHS could miss any possible warning signs, Gruber replied: "There’s no mismanagement and you’re right, the Medicaid program is under a lot of scrutiny from auditors, from finance, but it is a complicated and complex program and its complexity has expanded. The unprecedented events were really hard to evaluate the impact of, and we aren’t the only state to have that challenge."
Numerous states are reporting budget shortfalls and bracing for additional cuts as a result of changes at the federal level to Medicaid under the "Big, Beautiful Bill." While DHHS has said it does not plan any medical coverage cuts, Nate Crippes with the Disability Law Center and a member of the "Protect Medicaid Utah" coalition worried there could be issues down the road.
"Will there be, you know, not necessarily cuts to services but maybe not expanding things or doing the things they’d like to do because there’s less money than anticipated?" he said Tuesday. "I think there’s a lot of questions about what this means for the future and less federal dollars coming into the system with HR-1 passing last year."
In a statement to FOX 13 News, the Protect Medicaid Utah coalition called it an "opportunity to pause and reflect on how we continue to maintain a sustainable Medicaid program and wants to share publicly some of the questions we are considering."
The group asked if privatization of Medicaid has been fiscally responsible; if private equity is raising costs and lowering quality as more people will need it; and if the safety net is working if it's only catching the sickest individuals. Crippes said many lawmakers have come to see benefits from Medicaid and he said the coalition would be engaging with them to ensure people get coverage.
Rep. Ray Ward, R-Bountiful, who is the House chair of the Utah State Legislature's Social Services Appropriations Committee, said in a statement to FOX 13 News he has been told the budget shortfall is at least $100 million for the last fiscal year.
"Even more challenging, this incorrect estimate means that we anticipate facing a similar shortfall for this current budget year and a higher baseline estimated cost going forward. We clearly need better cost estimates, and our staff have been working on developing more advanced tools going forward. The good news is that we had already set aside Medicaid-specific rainy day funds to help us navigate these unexpected costs," he said.
But Rep. Ward signaled lawmakers may make changes going forward.
"Medicaid is a vital program that provides basic health care to children, pregnant women, the disabled, and the poor who are not able to work. We will need to go to work between now and the next legislative session to find ways to lower costs while still providing these critical medical services," he said in the statement.
The Utah State Legislature's Interim Health & Human Services Committee is expected to discuss the budget shortfall in a hearing next week. Gruber said her agency would also conduct an independent evaluation of the Medicaid program as a result.
"We know here at the department we have a serious responsibility to the taxpayers to get this forecasting lined up better with our actuals," she said.
