SB77 Alabama 2023 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Session

Regular Session 2023

Title

To create the Medicaid Emergency Reserve Fund and to provide for the withdrawal and use of amounts deposited into the fund.

Summary

This bill creates a Medicaid Emergency Reserve Fund to help Alabama Medicaid operate during budget shortfalls and prevent cuts to payments or benefits.

What This Bill Does

It establishes a new Medicaid Emergency Reserve Fund in the State Treasury to cover cost increases, unforeseen costs, or to prevent an overdraft if Medicaid's General Fund appropriation runs out. Funds can be used only with authorization from the Governor and after the agency has exhausted its General Fund for the year. It requires notification to the Governor and key lawmakers when shortfalls are anticipated, and it sets a process for the Governor to approve releases and disclose the maximum allowed amount. It also requires end-of-year transfers of unspent General Fund balances into the Reserve and annual carryforward and transfer appropriations, with an initial funding of $88 million to the Reserve for 2024 and $88 million to the Medicaid Agency from the Reserve, and a cap of $100 million for the Reserve.

Who It Affects

• Alabama Medicaid Agency: can draw from the Reserve to cover cost variances or to prevent a shortfall, but only after exhausting General Fund appropriations and with Governor approval.
• State government and lawmakers: must be notified about anticipated exhaustions and participate in oversight, including the Governor, State Treasurer, Finance Director, and legislative committees.
• Medicaid recipients and medical providers: potential protection from reductions in payments or elimination of optional but essential benefits during budget shortfalls.

Key Provisions

• Creates the Medicaid Emergency Reserve Fund in the State Treasury and governs its budgeting and administration.
• Allowed uses: (a) cover expenditure variances due to cost increases, (b) cover unforeseen costs, or (c) prevent overdraft/deficit if General Fund appropriation would be exhausted within the fiscal year.
• Funds may be used only with Governor authorization and only after the Medicaid Agency exhausts its State General Fund appropriation for the year.
• The Medicaid Commissioner must notify the Governor within 180 days if General Fund exhaustion is anticipated, including details on needed amounts and effects, and notify Senate Finance and Taxation Committee-General Fund, House Ways and Means Committee-General Fund, the State Finance Director, and the Legislative Fiscal Officer.
• The Governor will decide and disclose the maximum amount that may be released from the Reserve.
• End of FY2024 and each subsequent year: unencumbered balances in the related General Fund accounts (0106 and 0110) not appropriated in the future budget must be transferred to the Reserve by November 15 of the following year; the Legislature must appropriate carryforward and any transfers to the Reserve in the next year.
• Initial appropriations: $88,000,000 to the Reserve for FY2024 and $88,000,000 from the Reserve to the Alabama Medicaid Agency for use in FY2024.
• Cap: Reserve balance cannot exceed $100,000,000; no transfers into the Reserve if the balance is already $100,000,000.
• Investment: the State Treasurer will invest Reserve funds in eligible investments and any interest goes to the State General Fund; the Treasurer receives no fees for this work.
• Effective date: upon passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Medicaid Emergency Reserve Fund Act.