Medicaid Funding Modifications

10
26B-1-315
26B-1-315
26B-1-335
63J-1-315
0
Medicaid Funding Modifications
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jennifer Dailey-Provost
Senate Sponsor:
LONG TITLE
General Description:
This bill addresses funding for Medicaid services.
Highlighted Provisions:
This bill:
directs that interest earned on money in the Medicaid ACA Fund shall be deposited into:
the Division of Services for People with Disabilities Restricted Account; and
Medicaid Growth Reduction and Budget Stabilization Account, except in certain
circumstances;
directs money deposited into the Division of Services for People with Disabilities
Restricted Account from the Medicaid ACA Fund to be used to provide services to
eligible individuals who would otherwise remain on the Division of Services for People
with Disabilities' waitlist for services; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
26B-1-315
Effective
05/06/26
Superseded
07/01/26
, as last amended by Laws of Utah
2025, Chapter 135
26B-1-315
Effective
07/01/26
Repealed
07/01/34
, as last amended by Laws of Utah
2025, Chapter 285
26B-1-335
Effective
05/06/26
, as last amended by Laws of Utah 2024, Chapter 268
63J-1-315
Effective
05/06/26
, as last amended by Laws of Utah 2025, Chapter 113
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
26B-1-315
is amended to read:
26B-1-315
Effective
05/06/26
Superseded
07/01/26
. Medicaid ACA Fund.
(1)
There is created an expendable special revenue fund known as the "Medicaid ACA
Fund."
(2)
The fund consists of:
(a)
assessments collected under Chapter 3, Part 5, Inpatient Hospital Assessment;
(b)
intergovernmental transfers under Section
26B-3-508
;
(c)
savings attributable to the health coverage improvement program, as defined in
Section
26B-3-501
, as determined by the department;
(d)
savings attributable to the enhancement waiver program, as defined in Section
26B-3-501
, as determined by the department;
(e)
savings attributable to the Medicaid waiver expansion, as defined in Section
26B-3-501
, as determined by the department;
(f)
revenues collected from the sales tax described in Subsection
59-12-103(11)
;
(g)
gifts, grants, donations, or any other conveyance of money that may be made to the
fund from private sources;
(h)
interest earned on money in the fund
as described in
Subsection
(3)(d)
; and
(i)
additional amounts as appropriated by the Legislature.
(3)
(a)
The fund shall earn interest.
(b)
All
Beginning July 1, 2026, up to $7,000,000 of the
interest earned on fund money
shall be deposited
annually
into the
fund
Division of Services for People with
Disabilities Restricted Account created in Section
26B-1-335
.
(c)
Beginning July 1, 2026, except as provided in Subsection
(3)(d)
, remaining interest
earned on fund money after the deposit described in Subsection
(3)(b)
shall be
deposited annually into the Medicaid Growth Reduction and Budget Stabilization
Account created in Section
63J-1-315
.
(d)
In any year in which the principal in the Medicaid ACA Fund falls below the five-
year expenditure value at risk as determined by the Office of the Legislative Fiscal
Analyst and approved by the Executive Appropriations Committee, the amount
described in Subsection
(3)(c)
shall be deposited into the Medicaid ACA Fund.
(4)
(a)
A state agency administering the provisions of Chapter 3, Part 5, Inpatient
Hospital Assessment, may use money from the fund to pay the costs, not otherwise
paid for with federal funds or other revenue sources, of:
(i)
the health coverage improvement program as defined in Section
26B-3-501
;
(ii)
the enhancement waiver program as defined in Section
26B-3-501
;
(iii)
a Medicaid waiver expansion as defined in Section
26B-3-501
; and
(iv)
the outpatient upper payment limit supplemental payments under Section
26B-3-511
.
(b)
A state agency administering the provisions of Chapter 3, Part 5, Inpatient Hospital
Assessment, may not use:
(i)
funds described in Subsection
(2)(b)
to pay the cost of private outpatient upper
payment limit supplemental payments; or
(ii)
money in the fund for any purpose not described in Subsection
(4)(a)
.
Section 2. Section
26B-1-315
is amended to read:
26B-1-315
Effective
07/01/26
Repealed
07/01/34
. Medicaid ACA Fund.
(1)
There is created an expendable special revenue fund known as the "Medicaid ACA
Fund."
(2)
The fund consists of:
(a)
assessments collected under Chapter 3, Part 5, Inpatient Hospital Assessment;
(b)
intergovernmental transfers under Section
26B-3-508
;
(c)
savings attributable to the health coverage improvement program, as defined in
Section
26B-3-501
, as determined by the department;
(d)
savings attributable to the enhancement waiver program, as defined in Section
26B-3-501
, as determined by the department;
(e)
savings attributable to the Medicaid waiver expansion, as defined in Section
26B-3-501
, as determined by the department;
(f)
revenues collected from the sales tax described in Subsection
59-12-103(6)
;
(g)
gifts, grants, donations, or any other conveyance of money that may be made to the
fund from private sources;
(h)
interest earned on money
in the fund
as described in Subsection (3)(d)
; and
(i)
additional amounts as appropriated by the Legislature.
(3)
(a)
The fund shall earn interest.
(b)
All
Beginning July 1, 2026, up to $7,000,000 of the
interest earned on fund money
shall be deposited
annually
into the
fund
Division of Services for People with
Disabilities Restricted Account created in Section
26B-1-335
.
(c)
Beginning July 1, 2026, except as provided in Subsection
(3)(d)
, remaining interest
earned on fund money after the deposit described in Subsection
(3)(b)
shall be
deposited annually into the Medicaid Growth Reduction and Budget Stabilization
Account created in Section
63J-1-315
.
(d)
In any fiscal year in which the principal in the Medicaid ACA Fund falls below the
five-year expenditure value at risk as determined by the Office of the Legislative
Fiscal Analyst and approved by the Executive Appropriations Committee, the amount
described in Subsection
(3)(c)
shall be deposited into the Medicaid ACA Fund.
(4)
(a)
A state agency administering the provisions of Chapter 3, Part 5, Inpatient
Hospital Assessment, may use money from the fund to pay the costs, not otherwise
paid for with federal funds or other revenue sources, of:
(i)
the health coverage improvement program as defined in Section
26B-3-501
;
(ii)
the enhancement waiver program as defined in Section
26B-3-501
;
(iii)
a Medicaid waiver expansion as defined in Section
26B-3-501
; and
(iv)
the outpatient upper payment limit supplemental payments under Section
26B-3-511
.
(b)
A state agency administering the provisions of Chapter 3, Part 5, Inpatient Hospital
Assessment, may not use:
(i)
funds described in Subsection
(2)(b)
to pay the cost of private outpatient upper
payment limit supplemental payments; or
(ii)
money in the fund for any purpose not described in Subsection
(4)(a)
.
Section 3. Section
26B-1-335
is amended to read:
26B-1-335
Effective
05/06/26
. Division of Services for People with Disabilities
Restricted Account.
(1)
As used in this section, "account" means the Division of Services for People with
Disabilities Restricted Account created in Subsection
(2)
.
(2)
There is created a restricted account within the General Fund known as the "Division of
Services for People with Disabilities Restricted Account."
(3)
The account consists of:
(a)
carry forward funds from the division's budget;
and
(b)
unexpended balances lapsed to the account from the division's budget
.
; and
(c)
funds deposited into the account from the Medicaid ACA Fund in accordance with
Subsection
26B-1-315(3)(b)
.
(4)
At the close of a fiscal year, the division may, without an appropriation, deposit into the
account carry forward funds described in Subsection
(3)
.
(5)
Subject to appropriation, the Department of Health and Human Services
:

(a)
may expend funds from the account to serve individuals eligible for division services
statewide
.
; and
(b)
shall expend funds deposited into the account as described in Subsection
(3)(c)
to
serve individuals who are eligible for services from the division and who would
otherwise remain on the division's waitlist for services.
Section 4. Section
63J-1-315
is amended to read:
63J-1-315
Effective
05/06/26
. Medicaid Growth Reduction and Budget
Stabilization Account -- Transfers of Medicaid growth savings -- Base budget
adjustments.
(1)
As used in this section:
(a)
"Department" means the Department of Health and Human Services created in
Section
26B-1-201
.
(b)
"Division" means the Division of Integrated Healthcare created in Section
26B-3-102
.
(c)
"General Fund revenue surplus" means a situation where actual General Fund
revenues collected in a completed fiscal year exceed the estimated revenues for the
General Fund for that fiscal year that were adopted by the Executive Appropriations
Committee of the Legislature.
(d)
"Medicaid growth savings" means the Medicaid growth target minus Medicaid
program expenditures, if Medicaid program expenditures are less than the Medicaid
growth target.
(e)
"Medicaid growth target" means Medicaid program expenditures for the previous
year multiplied by 1.08.
(f)
"Medicaid program" is as defined in Section
26B-3-101
.
(g)
"Medicaid program expenditures" means total state revenue expended for the
Medicaid program from the General Fund, including restricted accounts within the
General Fund, during a fiscal year.
(h)
"Medicaid program expenditures for the previous year" means total state revenue
expended for the Medicaid program from the General Fund, including restricted
accounts within the General Fund, during the fiscal year immediately preceding a
fiscal year for which Medicaid program expenditures are calculated.
(i)
"Operating deficit" means that, at the end of the fiscal year, the unassigned fund
balance in the General Fund is less than zero.
(j)
"State revenue" means revenue other than federal revenue.
(k)
"State revenue expended for the Medicaid program" includes money transferred or
appropriated to the Medicaid Growth Reduction and Budget Stabilization Account
only to the extent the money is appropriated for the Medicaid program by the
Legislature.
(2)
There is created within the General Fund a restricted account to be known as the
Medicaid Growth Reduction and Budget Stabilization Account.
(3)
(a)
The following shall be deposited into the Medicaid Growth Reduction and Budget
Stabilization Account:
(i)
deposits described in Subsection
(4)
;
(ii)
beginning July 1, 2024, any general funds appropriated to the department for the
state plan for medical assistance or for Medicaid administration by the Division of
Integrated Healthcare that are not expended by the department in the fiscal year
for which the general funds were appropriated and which are not otherwise
designated as nonlapsing shall lapse into the Medicaid Growth Reduction and
Budget Stabilization Account;
(iii)
beginning July 1, 2024, any unused state funds that are associated with the
Medicaid program from the Department of Workforce Services;
(iv)
beginning July 1, 2024, any penalties imposed and collected under:
(A)
Section
17B-2a-818.5
;
(B)
Section
19-1-206
;
(C)
Section
63A-5b-607
;
(D)
Section
63C-9-403
63O-2-403
;
(E)
Section
72-6-107.5
; or
(F)
Section
79-2-404
; and
(v)
at the close of fiscal year 2024, the Division of Finance shall transfer any
existing balance in the Medicaid Restricted Account created in Section
26B-1-309

into the Medicaid Growth Reduction and Budget Stabilization Account.
(v)
funds deposited into the Medicaid Growth Reduction and Budget Stabilization
Account in accordance with Subsection
26B-1-315(3)(c)
.
(b)
In addition to the deposits described in Subsection
(3)(a)
, the Legislature may
appropriate money into the Medicaid Growth Reduction and Budget Stabilization
Account.
(4)
(a)
(i)
Except as provided in Subsection
(7)
, if, at the end of a fiscal year, there is a
General Fund revenue surplus, the Division of Finance shall transfer an amount
equal to Medicaid growth savings from the General Fund to the Medicaid Growth
Reduction and Budget Stabilization Account.
(ii)
If the amount transferred is reduced to prevent an operating deficit, as provided in
Subsection
(7)
, the Legislature shall include, to the extent revenue is available, an
amount equal to the reduction as an appropriation from the General Fund to the
account in the base budget for the second fiscal year following the fiscal year for
which the reduction was made.
(b)
If, at the end of a fiscal year, there is not a General Fund revenue surplus, the
Legislature shall include, to the extent revenue is available, an amount equal to
Medicaid growth savings as an appropriation from the General Fund to the account in
the base budget for the second fiscal year following the fiscal year for which the
reduction was made.
(c)
Subsections
(4)(a)
and
(4)(b)
apply only to the fiscal year in which the department
implements the proposal developed under Section
26B-3-202
to reduce the long-term
growth in state expenditures for the Medicaid program, and to each fiscal year after
that year.
(5)
The Division of Finance shall calculate the amount to be transferred under Subsection
(4)
:
(a)
before transferring revenue from the General Fund revenue surplus to:
(i)
the General Fund Budget Reserve Account under Section
63J-1-312
;
(ii)
the Utah Wildfire Fund created in Section
65A-8-217
, as described in Section
63J-1-314
; and
(iii)
the State Disaster Recovery Restricted Account under Section
63J-1-314
;
(b)
before earmarking revenue from the General Fund revenue surplus to the Industrial
Assistance Account under Section
63N-3-106
; and
(c)
before making any other year-end contingency appropriations, year-end set-asides, or
other year-end transfers required by law.
(6)
(a)
If, at the close of any fiscal year, there appears to be insufficient money to pay
additional debt service for any bonded debt authorized by the Legislature, the
Division of Finance may hold back from any General Fund revenue surplus money
sufficient to pay the additional debt service requirements resulting from issuance of
bonded debt that was authorized by the Legislature.
(b)
The Division of Finance may not spend the hold back amount for debt service under
Subsection
(6)(a)
unless and until it is appropriated by the Legislature.
(c)
If, after calculating the amount for transfer under Subsection
(4)
, the remaining
General Fund revenue surplus is insufficient to cover the hold back for debt service
required by Subsection
(6)(a)
, the Division of Finance shall reduce the transfer to the
Medicaid Growth Reduction and Budget Stabilization Account by the amount
necessary to cover the debt service hold back.
(d)
Notwithstanding Subsections
(4)
and
(5)
, the Division of Finance shall hold back the
General Fund balance for debt service authorized by this Subsection
(6)
before
making any transfers to the Medicaid Growth Reduction and Budget Stabilization
Account or any other designation or allocation of General Fund revenue surplus.
(7)
Notwithstanding Subsections
(4)
and
(5)
, if, at the end of a fiscal year, the Division of
Finance determines that an operating deficit exists and that holding back earmarks to the
Industrial Assistance Account under Section
63N-3-106
, transfers to the Utah Wildfire
Fund and State Disaster Recovery Restricted Account under Section
63J-1-314
,
transfers to the General Fund Budget Reserve Account under Section
63J-1-312
, or
earmarks and transfers to more than one of those accounts, in that order, does not
eliminate the operating deficit, the Division of Finance may reduce the transfer to the
Medicaid Growth Reduction and Budget Stabilization Account by the amount necessary
to eliminate the operating deficit.
(8)
The Legislature may appropriate money from the Medicaid Growth Reduction and
Budget Stabilization Account only:
(a)
for the Medicaid program; and
(b)
(i)
if Medicaid program expenditures for the fiscal year for which the
appropriation is made are estimated to be 108% or more of Medicaid program
expenditures for the previous year; or
(ii)
if the amount of the appropriation is equal to or less than the balance in the
Medicaid Growth Reduction and Budget Stabilization Account that comprises
deposits described in Subsections
(3)(a)(ii)
through
(v)
and appropriations
described in Subsection
(3)(b)
.
(9)
The Division of Finance shall deposit interest or other earnings derived from investment
of Medicaid Growth Reduction and Budget Stabilization Account money into the
General Fund.
Section 5.
Effective Date.
(1)
Except as provided in Subsection (2), this bill takes effect
May 6, 2026
.
(2)
The actions affecting Section 26B-1-315
Effective
07/01/26
Repealed
07/01/34
take
effect on
July 1, 2026
.
2-17-26 10:27 AM