By Mary C. Mayhew

Protecting healthcare funding in the state budget is about prioritizing a healthcare infrastructure that is always ready, available, and capable of responding to any emergency or crisis, whether it involves one person or many. It is about prioritizing timely access to care, from the most routine of primary and preventive care to the most specialized of complex care, for every Floridian. And, it is about prioritizing a healthcare workforce with the diverse range of skills and expertise that modern medicine demands.

After a special legislative session convened exclusively to pass a state budget for fiscal year 2026-27, lawmakers did just that: rejecting across-the-board healthcare funding cuts and investing strategically and prudently for long-term success so that the more than 24.3 million Floridians who call the Sunshine State home have the advanced healthcare system they deserve. Even though the total budget is less than that for 2025-26, it maintains key healthcare funding.

The final $114.5 billion state budget for FY 2026-27 includes $49.2 billion in healthcare funding, $36.5 billion of which is for the Medicaid program that provides healthcare access for vulnerable children, low-income elderly, individuals with disabilities, and extremely low-income adults and pregnant women.

Of the 3.9 million Floridians receiving healthcare services through Medicaid, more than 2.1 million are children. Medicaid is also the dominant payor for mental health services and for the elderly in nursing homes. While seniors and individuals with disabilities represent a minority of enrollees, their annual Medicaid costs are nearly three times higher than the average enrollee due to greater medical and long-term care needs – including the 40-year-old with Down syndrome who needs daily assistance, for example, or the 85-year-old grandmother in a nursing home.

While the Senate’s initial budget proposal included a 3 percent reduction to hospital base Medicaid payments, the final budget ultimately maintained those payments, recognizing the important role Medicaid funding plays in supporting access to care across Florida. Hospitals have experienced nearly 30 percent increases in major cost areas — including workforce, prescription drugs, and medical supplies — over the last several years, while Medicaid base payments continue to reimburse hospitals, on average, only about 60 cents for every dollar spent caring for Medicaid patients. Against that backdrop, preserving Medicaid funding helps ensure hospitals can continue serving their communities and meet growing healthcare needs.

Reductions in hospital Medicaid payments can create challenges for hospitals as they work to maintain essential services such as trauma care, labor and delivery, behavioral health, and burn care, while also investing in workforce, technology, and facility improvements. Stable and predictable Medicaid funding allows hospitals to plan for the future and continue providing high-quality care to patients throughout Florida.

In addition to maintaining Medicaid funding and the healthcare access it supports, the passed budget includes essential funding to continue growing Florida’s healthcare workforce. Pending any line-item vetoes by the Governor, that funding includes $130 million for the LINE and PIPELINE nursing education programs and continues the Legislature’s significant investment in physician graduate medical education slots. This funding is absolutely essential given Florida’s population growth and the existing healthcare workforce shortage.

The budget also reflects ongoing growth and needs in other critical areas. Just under $15 million is included to expand the existing pilot program for individuals with developmental disabilities. An additional $15 million is also appropriated to support tiered reimbursement for Statewide Inpatient Psychiatric Programs, which aligns rates with the level of care needed for high-risk children and adolescents with complex conditions requiring extended treatment in a secure setting. Additionally, the budget directs the state Medicaid agency to seek federal approval for an IMD Medicaid Waiver by October 1. If approved, the Waiver will expand access to residential treatment for Medicaid-eligible individuals experiencing a behavioral health crisis.

The budget also reappropriates remaining first-year funding of $209 million for the federal rural health transformation program for continued use into FY 2026-27. The federal government awarded these funds to the state in December 2025 to strengthen the rural healthcare workforce, innovation, and access.

In the state budget for FY 2026-27, the state legislature demonstrated its commitment to advancing Florida’s healthcare system so that every Floridian has access to the care they need in the right setting at the right time. As one of the fastest growing states in the country – attractive to families, companies, retirees, and visitors alike – Florida’s growth and success depend on continuing to protect healthcare programs, including Medicaid, from funding cuts, and investing in the healthcare infrastructure to meet future needs. The FY 2026-27 state budget is a step in the right direction.

Mary Mayhew is President and CEO, Florida Hospital Association.