Feb. 24, 2026
Legislative Budget Proposals Released: What They Mean for Health Care
By Sean Graham
Majority-party Democrats in the House of Representatives and Senate released their budget proposals this week, signaling the beginning of negotiations on spending plans and the homestretch of the 2026 session, which is scheduled to adjourn on March 12.
At a high level, the WSMA is grateful that both budget proposals seek to maintain access to care for state residents who are impacted by recent policy and fiscal changes from the federal government. The budgets also fully fund Foundational Public Health Services, which were slated for cuts in the governor's spending plan released in December. Importantly, neither budget relies on broad-based taxes on the physician community nor cuts to Medicaid reimbursement or coverage for physician services.
Following years of strong economic growth, state tax collections have slowed in recent years. Meanwhile, enrollment and utilization of state programs, including in the health care space, have remained strong, creating a deficit that legislators worked to bridge last session but has persisted.
Last week, budget writers got good news in the form of a positive revenue forecast, showing tax collections projected to increase by $827 million more than was forecasted in November. This helped obviate deeper cuts in the legislative budget proposals, though both budgets do make targeted reductions to state programs.
The state's fiscal challenges are exacerbated by H.R. 1, the congressional tax and spending bill signed into law by President Donald Trump last summer. Among other provisions, the federal law reduces federal funds to support our state's health care system and imposes restrictions on the ability of undocumented individuals to access health care.
The House and Senate budget proposals differ in details, but both dedicate funding intended to continue to support Medicaid coverage, aligning with one of the WSMA's fiscal priorities. One provision directs the Health Care Authority to develop a fee-for-service coverage program open to individuals ineligible for Medicaid, such as undocumented residents of the state. Another provides support for "Cascade Care Savings," which provides subsidies to make insurance coverage through the Washington Health Benefit Exchange more affordable, with the House allotting $25 million and the Senate $47.5 million to the program.
There are concerning elements of the spending plans that the WSMA will be engaging on through the course of budget negotiations. Both proposals would divert funding from the health professions account at the Washington State Department of Health, which is the repository for licensure fees from physicians and other health care practitioners. The House uses funds to backfill programs at DOH. The Senate proposes moving away from the historical paradigm of professions being required to be self-sustaining and would have physician licensure fees support other professions. Separately, the House budget proposes eliminating Medicaid coverage for physical, speech, and occupational therapy services.
On the revenue side of the ledger, both budgets presume passage of the millionaires tax proposal in Senate Bill 6346, as well as the elimination of tax preferences for insurance carriers and prescription drug warehousing. Like the governor's budget proposal, the legislative budgets also propose to tap around $800 million from the state's rainy day reserve account.
Looking ahead, both spending plans are expected to be approved by their respective budget committees and chambers this week. Then a conference committee will be convened, allowing negotiators from the two chambers to iron out the differences between the proposals. Assuming agreement is reached, the budget will likely be one of the last actions legislators take before adjourning session.
For questions about the budget, policy bills, or anything happening in Olympia, email me at any time. If you want to learn more about where things landed in the 2026 legislative session, register for our post-session webinar, being held at noon on Friday, March 13.
Sean Graham is WSMA's senior director of government affairs and policy