Alaska House Finance Subcommittee hears a budget overview for DHSS

On Monday, the Alaska House Finance Subcommittee of Health and Social Services heard the budget overview for the Alaska Department of Health and Social Services (DHSS). This included the Fiscal Year (FY) 2021 Management Plan and the FY2022 Governor’s Request.

 

 

For the FY2021 Management Plan, DHSS has been allocated $3.45 billion, which does not include the COVID-related funding expected for 2021. The department expects to receive just over $103 million from the General Fund and the federal government for COVID-related expenditures. This makes the total budget for FY2021 just over $3.5 billion.

 

Image courtesy of Alaska DHSS

 

Sylvan Robb, assistant commissioner for DHSS, said that they split up the COVID-related spending from the regular budget to get a sense of how this budget will compare to other years.

“This is an effort to make it easier to see what’s really happening from year to year without the interference from the pandemic, which obviously skews the budget quite a bit.”

For FY2022, the Governor’s requested budget is just over $3.4 billion for DHSS, with just over $1 billion of the budget coming from unrestricted General Funds and $2.06 billion coming from the federal government. This amount does not include COVID-related spending.

In the FY2022 budget, there is a reduction of about $45 million dollars from the FY2021 budget. Robb says this is due to upcoming cuts to Medicaid spending.

“Thirty-five million dollars of that reduction is from Medicaid, but we do have carryforward language in the bill that would keep the Medicaid budget flat for FY22. That brings the true reduction to just about $5.5 million from FY21 to FY22.”

The language of the bill would allow DHSS to work with the Centers for Medicare and Medicaid Services (CMS), said Robb.  

“There is carryforward language in the bill that would allow us to carry forward up to $35 million, which would give us essentially a flat Medicaid budget for FY22. Having that year of grace period really allows us to work with CMS and our partners so that we can find sustainable changes to implement in FY23.”

 

Image Courtesy of Alaska DHSS

 

The budget for Medicaid services in FY2022 is $2.4 billion, which is the largest portion of the budget. The majority of that money will be coming from the federal government, $1.7 billion. The Federal Medical Assistance Percentage (FMAP) is between 72-73%. The FMAP are the percentage rates used to determine the matching funds rate from the federal government.

As of June 2020, DHSS says they have just about 262 thousand enrollees in Medicaid The utilization rate is about 77.1%, which Robb says is lower than it has been in a number of years.

Due to the enhanced FMAP for 2021 and the reduction in utilization, Robb expects that DHSS will lapse $65 million from FY21 in Medicaid funds.

 

Image courtesy of Alaska DHSS

 

The Division of Behavioral Health includes programs for suicide prevention, addiction recovery services and behavioral health treatment It is the second largest portion of the budget. 

This division accounts for $89.2 million of the FY22 budget. The majority of their funding will go to community agencies to fund behavioral health services.

The department also broke down the funding for the Division of Health Care Services, Division of Senior and Disabilities Services and the Division of Public Assistance in the presentation.