Every state budget is, at its core, a document of priorities. Legislators weigh competing needs against limited revenue, and the distance between a department’s request and its appropriation can be measured not only in dollars but in the services that fall away. In South Carolina this spring, that distance may amount to $27.5 million, and it runs directly through the Medicaid programs that fund autism services for some of the state’s most vulnerable residents.

The South Carolina Department of Health and Human Services, which administers the state’s Medicaid program under the name Healthy Connections, submitted a $203 million state general funds request to the legislature for fiscal year 2026–27. The request, signed by Director Eunice Medina and submitted in September 2025, was structured around three priority items: maintaining current Medicaid reimbursement rates and service levels, covering federally required Medicare premium increases for dual-eligible beneficiaries, and sustaining the state’s home and community-based services waiver programs.

The House Ways and Means Committee, which writes the initial version of the state budget, approved $175.5 million instead, according to a call to action made by the Council of Autism Service Providers (CASP). (The formal bill text of H. 5126, the FY 2026–27 General Appropriations Bill, had not been published on the South Carolina Legislature’s website as of publication.) The full House began floor debate on March 9; House leadership aimed to complete passage by March 11.

For providers delivering applied behavior analysis therapy and other autism services under Medicaid, the gap between those two numbers is not abstract. Embedded in the department’s top-priority request is an explicit commitment to raise ABA reimbursement rates. Denying the full appropriation puts that commitment at risk.

What the Department Asked For, and Why

The $203 million request is divided into three components. The largest, $102.6 million in recurring general funds, covers what SCDHHS calls “maintenance of effort”: the annualized cost of keeping the Medicaid program operating at its current configuration. That figure accounts for enrollment growth, inflationary pressure on service costs, and a modest decline in South Carolina’s Federal Medical Assistance Percentage, the rate at which the federal government matches state Medicaid spending. The FMAP dropped from 69.57 percent in SFY 2025–26 to approximately 69.34 percent in SFY 2026–27, shifting additional costs onto the state.

A substantial portion of the maintenance request also reflects a structural revenue problem that has accumulated over several years. The department’s budget submission notes that combined revenue from the Cigarette Tax Surcharge and Tobacco Master Settlement Agreement declined from approximately $191 million in SFY 2021 to $148 million in SFY 2025, a trend projected to continue. The department requested $53 million within its maintenance package specifically to offset that shortfall.

The second priority item, $53.1 million, covers rising Medicare premium costs for dual-eligible beneficiaries. The third, $47.3 million, supports waiver programs that allow individuals who would otherwise require nursing home placement to receive care at home or in the community, at less than half the institutional cost.

Notably, the ABA rate alignment commitment appears within the first priority item. The department’s justification states that its annualization request “includes necessary reimbursement methodology updates, and will allow the state to more closely align reimbursement rates for Applied Behavior Analysis therapy services with other states in the southeast region,” with the stated goal of facilitating “access to the existing array of autism spectrum disorder treatments.” That language makes ABA rate parity a named component of the maintenance of effort package, not a separate or lower-priority initiative.

The Provider Participation Equation

Medicaid reimbursement adequacy is a recurring pressure point for ABA providers nationally. Because Medicaid rates are set by state agencies rather than negotiated with payers, they are subject to the same fiscal constraints that govern all government appropriations. When legislatures appropriate less than agencies request, the typical result is that reimbursement rates are held flat or reduced, even as providers’ operating costs continue to rise.

The department’s own contingency planning documents the likely direction of any shortfall. Its FY 2026–27 cost reduction plan, filed alongside the budget request, states that general fund cuts “would be made to provider contracts and reimbursement for services,” with no associated staff reductions. In other words, the savings would come directly from the provider side of the ledger.

For ABA providers, the stakes extend beyond rate levels. The department’s Healthy Connections program covers more than one million South Carolinians, including approximately 60 percent of the state’s children, according to the budget submission. A significant share of children receiving ABA therapy are covered by Medicaid, particularly in lower-income households where private insurance is unavailable or insufficient. If providers determine that reimbursement no longer covers their operating costs, the predictable response is to limit Medicaid intake or exit the program, which extends wait times and narrows access for families with no alternative.

CASP Mobilizes Providers Ahead of House Vote

CASP, a national trade organization representing ABA providers and other autism service organizations, flagged the South Carolina budget gap as urgent and issued a call to action ahead of the House floor debate, which began March 9. The organization directed its South Carolina stakeholders to contact their House representatives and urge them to restore the full $203 million request.

CASP’s message tracked closely with the department’s own framing: that the appropriation is not a discretionary spending question but a floor beneath which the existing provider network and service levels cannot be maintained. The appeal emphasized potential consequences for provider participation, wait times, and access to care.

The floor debate window was narrow. House leadership aimed to complete passage by Wednesday, March 11, before the bill advances to the Senate, which is drafting its own version of the budget and expected to take it to the floor in April.

A Confluence of Pressures

The South Carolina situation reflects a layered set of fiscal pressures that have converged in the current budget cycle. The decline in tobacco-related revenue has been unfolding for years and is structural rather than cyclical, meaning it does not resolve on its own. The FMAP reduction, though modest in percentage terms, translates into tens of millions of additional state dollars required simply to hold program levels steady. And the ABA rate alignment commitment, now documented in the department’s budget submission as a named objective, represents an affirmative investment that would be deferred if the full request is not funded.

That combination makes the current year’s appropriation consequential beyond the usual margin of error in state budgeting. For providers in South Carolina who have been waiting for rates to move toward regional parity, the Ways and Means Committee’s reduction is not simply a shortfall. It is the specific mechanism by which a documented state commitment to their reimbursement may or may not be kept.