Michigan Legislature Approves $82.5 Billion Budget for FY 2025, Including MIDOCs Enhancement and Health Services Funds

On June 27, the Michigan Legislature voted on and approved a state budget for Fiscal Year 2025 which begins October 1, 2024. This budget was months in the making, with negotiations culminating among the Governor's office, Senate, and House leadership over the past few weeks. There were several issues that complicated the budget, including changes to Michigan's Public School Employees' Retirement System (MPSERS) and the Strategic Outreach and Attraction Reserve (SOAR). Regarding MPSERS, the Legislature negotiated a one-year deal that reduces the amount school districts and teachers pay into retiree healthcare, with the state providing funding at an increased cost of $176.4 million. To fund this change in practice, there was no increase to the per pupil foundation allowance. Regarding SOAR, while many discussions were taking place behind the scenes to revamp the fund for future economic development projects in the state, the Legislature will now postpone making additional changes until the fall.

Following these negotiations, the final budget for the Fiscal Year 2025 sits at $82.5 billion. The budget now goes to Gov. Gretchen Whitmer for her signature. 

FY 2025 Budget Highlights

The Health and Human Services budget allocates $37.7 billion Gross ($6.7 billion GF/GP), which includes:

• $460.7 million ($188.9 million GF/GP) for Medicaid cost adjustments.

• $268.1 million ($27.1 million GF/GP) reduction for Healthy Michigan Plan cost adjustments.

• $161.8 million ($30.1 million GF/GP) for Certified Community Behavioral Health Clinics (CCBHC) to authorize 12 FTE positions and a study.

• $28.7 million ($10 million GF/GP) for a $0.20 per hour direct care wage increase.

• $17.2 million ($6 million GF/GP) to increase autism behavioral technician hourly rates up to $66 per hour.

• $5 million ($1.7 million GF/GP) for training supports and stipends for live-in family members that provide caregiving supports to Home and Community-Based Services waiver beneficiaries.

• $3 million GF/GP for the long-term care ombudsman program to investigate resident concerns, respond to involuntary discharges, and provide trainings.

• $22.7 million ($6.4 GF/GP) to increase Medicaid behavioral health reimbursement rates by approximately 33% for health plans and fee-for-service.

• $9.2 million (one-time) for MIDOCS Enhancement.

• $8.3 million Gross ($2.5 million GF/GP) to provide Medicaid reimbursement for services provided by hospital-based, peer-support recovery services for individuals with substance use disorders.

• $4 million for recovery support services, $25 million on a one-time basis for regional community mental health entities (PIHPs), $2 million for tribal communities, and $1.9 million for recovery community organizations from the Opioid Healing and Recovery Fund.

• $1.6 million ($1 million one-time) for primary care training and a protected health information tool.

• $1.5 million (one-time) for addiction medicine training programming, including anti-stigma education, fellowship GME, and addiction specialists.

• $2 million ($500,000 GF/GP) for a nursing home pre-admission screening and evaluation program for individuals who have a serious mental illness and are being admitted to a nursing facility.

• $2.5 million GF/GP for the statewide expansion for the oral health assessment program for school children.

• $6.8 million ($2.6 million GF/GP) to increase Medicaid reimbursement rates for doula services.

• $5 million GF/GP for the continuation of Perinatal Quality Collaboratives.

• $3.3 million ($918,700 GF/GP) and 1 FTE position to create additional, specialized reimbursement rates for providers participating in the Maternal Infant Health Program.

• $500,000 in TANF revenue to purchase and distribute infant care seats.

• $5.5 million GF/GP for the firearm injury and violence prevention grant.

Throughout the budget process, MAFP worked with legislators and other groups to ensure Michigan continues to invest in primary care and the primary care workforce. Any questions regarding the budget can be sent to MAFP Director of Government Relations Grant Meade.