Source: Georgians for a Healthy Future
On February 25, the House and Senate reached an agreement on the Amended Fiscal Year 2026 (AY26) state budget. The final version now goes to the Governor for his signature, after which the new spending plan will take effect.
Here is what this budget means for health care, human services, and the programs Georgians rely on:
The Big Picture
The final AY26 budget includes major investments in mental health infrastructure and physician training while cutting funding for programs that directly affect consumer affordability and access. On the investment side: $409 million for a new 300-bed state mental health hospital (adopting the Senate’s approach), a $20 million hybrid graduate medical education package, near-full preservation of the House’s foster care funding, and a $45 million Housing Trust Fund compromise.
On the cuts side: The conference committee reduced state funding for the reinsurance program that stabilizes individual market premiums and rejected $35 million for modernizing the Gateway eligibility system. (Keep reading for more details about what these cuts mean for Georgians.)
Medicaid and PeachCare
The conference committee aligned Medicaid funding more closely with the House’s proposed funding levels. For the Aged, Blind, and Disabled population, the final budget includes an approximately $227 million adjustment to reflect enrollment and utilization growth. That amount is below the Senate’s proposed $241 million but is still a significant increase. Low-Income Medicaid and PeachCare adjustments remain enrollment-driven and consistent across all versions.
Georgia Gateway and Eligibility Systems
The conference committee rejected the $35 million to modernize Georgia Gateway, the online system used by more than 2 million Georgians to apply for Medicaid, PeachCare, SNAP, and other benefits. This is the second year in a row that this funding has been cut despite support from the Governor and the House. Gateway’s ongoing technical problems, including application errors and processing delays, make it harder for eligible families to get and keep the benefits they qualify for. Gateway’s technical issues also contribute to Georgia having one of the highest SNAP error rates in the country. Without this investment, Georgia will continue patching an outdated system rather than building one that really works for families. The budget does include $6.2 million for targeted fixes to reduce SNAP errors, but the broader modernization effort will not move forward in the current fiscal year.
Rural Health and Workforce
The conference committee landed on a hybrid approach to graduate medical education that draws from both chambers. The base investment is the House’s $17.8 million for 103-plus residency slots across South Georgia. On top of that, the final budget adds two Senate-originated items: $432,000 for a psychiatry fellowship in Thomasville and $2.125 million for internal medicine residencies at Southeast Georgia Medical Center in Brunswick. The total GME package totals approximately $20.4 million, exceeding either chamber’s original proposal.
Other rural health items in the final budget: $3.2 million for the rural medical and dental clinic grant program (reduced from $4.8 million in both chambers), $734,000 for the Rural Surgery Initiative and child and adolescent psychiatry training at Augusta University (down from $1.2 million in the House), and $900,000 for health care access in East Central Georgia communities identified as medical deserts.
Behavioral Health and Mental Health InfrastructureThe conference committee adopted the Senate’s $409 million investment in a new 300-bed Georgia Regional Hospital in Atlanta, the first state mental health hospital built in Georgia since the 1960s. This is more than fifteen times the House’s $27 million proposal. The investment responds to a real crisis: over 750 people are waiting for a state hospital bed, with average waits approaching 10 months, and county jails have become de facto mental health facilities across the state.
As we discussed in our Senate budget analysis, this investment also raises important questions about how a large congregate facility fits within the community-based mental health system Georgia has spent 16 years building since the Olmstead settlement. GHF will continue monitoring this facility’s development, and whether community-based services are maintained and increased to prevent Georgians from needing hospitalization altogether.
Other behavioral health items: $20.7 million for a 40-bed forensic restoration facility at East Central Regional Hospital in Augusta (matching the Governor’s recommendation).
Not included: the $500,000 behavioral health provider rate study focused on the abandonment of patients with intellectual and developmental disabilities in community hospitals. This House-only addition could have produced important data about whether reimbursement rates are adequate for providers that care for people with IDD, and its absence means that question remains unanswered heading into FY 2027.
Child Welfare and Foster Care
The conference committee largely sided with the House on child welfare funding. Out-of-Home Care (typically called “foster care”) receives $81.1 million in state funds ($86.6 million total), very close to the House’s $82.7 million and nearly double the Governor and Senate’s $41.5 million recommendation.
Insurance and the Marketplace
This is the area where the conference committee made its most unexpected move. Both the House and the Senate had proposed a $25 million reduction to the 1332 waiver reinsurance program. The Senate then reversed that cut in its version. The conference committee not only reinstated the reduction but doubled it to $50 million, bringing total reinsurance funding from approximately $145.9 million down to roughly $95.9 million in state funds. Neither chamber had proposed a reduction of this size.
The reinsurance program stabilizes premiums on Georgia’s individual insurance market, and this cut comes at a particularly precarious moment. The state is simultaneously shifting the source of reinsurance funding away from general appropriations and toward fees paid by insurers participating in Georgia Access. That means the program’s revenue base is increasingly tied to marketplace enrollment levels. As Georgia Access enrollment drops due to the loss of the enhanced premium tax credits (ePTCs), insurer fees will decline, and the revenue supporting reinsurance would shrink on top of this $50 million reduction. This could impact Georgia’s ability to stabilize and lower premiums for Georgia Access enrollees.
Other Health-Related Investments
• $45 million for the State Housing Trust Fund to address homelessness, a compromise between the House ($50 million) and the Senate ($10 million directed solely to veterans). A separate $5 million is included in the Department of Veterans Service budget to address veteran homelessness, bringing the total investment in homelessness to approximately $50 million.
• $2.15 million for school-based mental health support, including $1.4 million for social workers and $750,000 for a pilot program helping districts maximize mental health services reimbursement.
