Why Should Delaware Care?
Delaware’ Department of Health and Social Services is the second largest state agency behind the Department of Education. Its budget is nearly $2 billion and growing each year as the state ages and health care costs rise.
Delaware’s state health department, which last year received $1.7 billion from state taxpayers, requested an additional $200 million on Monday during a committee hearing before state legislators responsible for crafting the state’s final operating budget later this year.
During the Joint Finance Committee hearing, legislators also expressed concerns with a new medical school proposed by Gov. Matt Meyer, which he intends to fund for the next five years using federal dollars meant to bolster rural health across the country.
One of the largest line item increases for Fiscal Year 2027’s proposed budget was an additional $128.5 million for the state’s Medicaid program, as eligibility changes at the federal level have upended programs across the country.
If passed as is, the Delaware Department of Health and Social Services (DHSS) budget would reach nearly $2 billion in the next budget cycle, maintaining its position as the second largest state agency behind the Department of Education.
DHSS Secretary Christen Linke Young addressed members of the committee, saying her office had three priorities going into 2027: responding to federal changes, innovating services and working to bring down health care costs.
“DHSS, like businesses and families across the state, struggles with the high and rising cost of health care services,” she said at the hearing.
Medical school concerns
During the hearing, lawmakers and DHSS Secretary Young sparred over the impact a proposed four-year medical school would have on the state’s health care workforce.
One of those lawmakers, State Sen. Trey Paradee (D-Dover), who also chairs the Joint Finance Committee, questioned the cost of building and sustaining a medical school when the Delaware Institute of Medical Education and Research (DIMER) already places medical students in nearby medical schools like Thomas Jefferson University and the Philadelphia College of Osteopathic Medicine.
Young replied that the goal of the medical school is to keep young, learning physicians within the communities they train and to “greatly reduce the friction it takes to lure people” back to Delaware if they study out of state.
Paradee also expressed concerns about sustainably funding the school long term, when the state already funnels hundreds of millions of dollars to multiple public universities.
At the end of 2025, the federal government awarded Delaware $157 million as part of a national program aimed at bolstering rural health care across all 50 states. The initial award represents the first batch of funding Delaware hopes to receive over the next five years.
Delaware budgeted more than $100 million to establish and operate a medical school for the duration of the grant, but that amount is subject to change depending on how much the state receives between now and 2031.
“Once these rural health dollars go away in a few years the question becomes, what is the state’s commitment?” Paradee said.
State Sen. Eric Buckson (R-South Dover) said he also supports the current DIMER system used to place Delawareans in nearby medical schools. If that program does not have enough seats, he said it would make more sense to invest in a DIMER expansion rather than a new school.
Still, Buckson said if the state does pursue the medical school, he hopes it is “highly successful.”
Separately, Rep. Krista Griffith (D-Fairfax) questioned how the state intends to keep young physicians in the area following their training.
Young pointed to a scholarship program the state hopes to award with the federal grant money, which would require medical students to commit to practicing in rural Delaware five years after their residency.
Medicaid costs rise with long-term care
Andrew Wilson, the director of the Delaware Division of Medicaid and Medical Assistance (DMMA), pointed to long-term care for seniors and people with disabilities as one of the main cost drivers for Medicaid going into the next fiscal year.
In an interview with Spotlight Delaware, Wilson called long-term care the “top line” driver for Medicaid costs to the state, but he said it is not the only factor causing the spike. Wilson also pointed to pharmaceutical prices, as well as the cost of health care as reasons for the requested increase.
Other factors like an increasing and aging population have contributed to more people using long-term options like home or community care, Wilson said. While the increases in Delaware’s population may not be dramatic, retirees and those seeking long-term care cost more to the state than people not using those services.
“We spend almost seven times the amount of funds on one of those individuals versus somebody in our mainstream Medicaid program,” Wilson said.
Separately, President Donald Trump’s One Big Beautiful Bill Act, signed last year, would impose new work requirements for those on Medicaid.
A work requirement itself is not entirely new, but universal ones imposed under the OBBBA set a new precedent for the social safety net.
During Trump’s first term, he approved waivers for a handful of states implementing work requirements. But during the Biden administration, those waivers were pulled, KFF reported in 2024.
Wilson said that people in states with work requirements prior to the OBBBA were often compliant with employment rules, but would become ineligible for the program because of the paperwork demands.
And in Delaware, he said he expects those same paperwork woes to manifest themselves here with the new requirements. However, he said the department’s aim is to keep as many people from falling through the cracks as possible.
“Our goal is to keep as many people as we can on the program,” Wilson said.
