I'd mentioned earlier that the state of Wisconsin was seeing its Medicaid expenses were running higher than expected. Last week,
the Legislative Fiscal Bureau sent a note further explaining why the shortfall in Medicaid was happening, and what could be done about it.
First, the LFB mentioned the good news that Wisconsin’s attempt to grab more federal Medicaid dollars for hospital services has been okayed.
In a January 15, 2026, memorandum to you on the 2025-27 biennium general fund condition, it was noted that there was a possibility that the Act 15 [2025-27 state budget] hospital assessment and hospital access payment provisions would not be approved. This was based on preliminary guidance issued by the federal Centers for Medicare and Medicaid Services (CMS) regarding states' use of provider assessments in their Medicaid programs, which suggested that the Act 15 increase may not be granted grandfather status, and thus be could be disallowed under the federal One Big Beautiful Bill Act. Because Act 15 assumed that a portion of the assessment revenues would be used to offset GPR expenditures for the Medical Assistance (MA) program, a decision to not grant grandfather status would result in a GPR budget shortfall for the program of nearly $800 million over the biennium. However, CMS has now approved the Act 15 change, and on June 29, 2026, the Department of Health Services (DHS) published a notice in the Wisconsin Administrative Register indicating that the Act 15 assessment and related hospital access payment provisions are in effect.
You may remember these increased assessments and payments to hospitals were the reason that
Governor Evers and the Wisconsin Legislature had to work through the night to get the state budget signed before GOPs in DC were able to formally pass Trump Tax Scam 2.0 into law. That situation also included the absurd series of events where
Congressman Derrick Van Orden was telling Evers and the Legislature to increase the hospital assessment ASAP….
because Van Orden was going to vote for the GOP Tax Scam that would prevent them from raising it in the future!
But even though the hospital assessment is OK for RFK, Dr.Oz and company, the LFB says that there are hundreds of millions of dollars that have to be made up in the program.
Although the Act 15 hospital assessments received federal approval, DHS currently projects that the program will have a $322.4 million GPR budget shortfall for the 2025-27 biennium, due to factors unrelated to the Act 15 hospital provisions. Except for the number of enrollees in the elderly category, which are now projected to be modestly higher than budget estimates, enrollment in other groups is trending lower than projected. Consequently, the projected deficit is primarily the result of higher expenditures in certain service categories, despite the lower enrollment. In particular, the program is experiencing higher costs for prescription drugs, nursing homes, and federally qualified clinic services, among others. The following table shows the major service categories for which expenditures are projected to be above or below budget estimates. In addition to the dollar variance, the table also shows the percentage difference. Since only the service categories that show a substantial dollar variance from budget estimates are shown, the amounts in the table do not sum to the total projected shortfall.
The LFB goes on to note that because Medicaid expenses have to be paid for if someone qualifies for coverage of thosae services, there is likely to be a need for the new Governor and Legislature to have to figure out how to fill this budget hole when they take office next January.
….The Department [of Health Services] may have some ability to modify or delay healthcare provider or managed care payments in order to address the shortfall, although these measures would have negative consequences that would also need to be considered. Even if the Department does reduce the imbalance through payment changes, these measures may not be sufficient to fully resolve the shortfall, and budget adjustment legislation may need to be considered prior to the end of the biennium.
Given that Wisconsin is projected to have over $2 billion carried over into this next budget, it may be as easy as designating some of those funds to pay for the higher Medicaid expenses for the 2025-27 biennium. But it also shows that there may be a lot more funds needed to pay for Wisconsin’s health care services in the next 2 years, and unless Medicaid is expanded (which would cut over $1 billion in each of the next two years), it could cut into any chances of further tax cuts or property tax relief as well as investments into roads and education.
Of course, you know what could take care of all of this?
Being one of the last 10 states in America to expand Medicaid under the Affordable Care Act, as Governor Evers has asked for in each of the last 4 budgets, and the GOP Legislature has refused to do. This would have the Feds take up almost 30% more of everyday Medicaid expenses than they do today, instead of having the State of Wisconsin pay for it, and when the Evers Administration asked the Legislature to allow Medicaid to cover Wisconsinites that make between 100% and 138% of the poverty line (between $33,000 and $45,540 for a family of 4 in 2026), they estimated over $1.9 billion in state tax dollars would be saved by doing so.
This amount of savings will likely be even larger today, given the increase in health care costs for services of people that currently use Medicaid for services.
In addition, Medicaid expansion would be a sizable benefit for those living just above the poverty line in Wisconsin.
Trump/GOP Tax Scam 2.0 drove up the costs of being covered by policies purchased on the Obamacare exchanges - which is often how these folks end up getting insured because Medicaid hasn't been expanded, if they have any coverage at all these days.
Companies offering Obamacare health insurance plans next year are requesting payment rates representing a 14% median increase to premiums over 2026 rates, according to data from health policy research group KFF.
The proposed rate for 2027 represents the second-highest increase since 2018, KFF said. Insurers must submit proposals to regulators by July 15, detailing expected costs and planned price changes ahead of the new year.
When insurance companies asked for a median rate hike of 18% last year, they pointed to an expected greater number of higher-risk, or sicker, patients enrolled in the plans that would not be offset by less costly, healthier enrollees....
Insurers expect the pool of patients with greater medical needs to increase premiums by 4% next year as healthy members continue to drop coverage in 2027. Wider economic inflation, rising costs of medications and increased consolidation of medical providers are also driving the increase in premiums, KFF said.
Obamacare enrollment declined 13% in 2026, from 22.1 million people in 2025, after the expiration of extra subsidies meant to help people keep coverage during the COVID-19 pandemic.
Seems like expanding Medicaid would both fill in the budget hole we have in Medicaid, and make health care more affordable not only for the hundreds of thousands of Wisconsinites that rely on Obamacare for coverage, as well as the many others who have seen their health care costs go up in the last year. I wqould think all WisDems should be running hard on this fact for November, as those health insurance hikes are going to be getting sent to a whole lot of voters in the weeks before they go to the polls this Fall. And there is no longer a GOP gerrymander in place to block Dems from taking over the Legislature and making this into reality.
And given that Tom Tiffany was a part of the group of GOP legislators that refused to expand Medicaid in Evers' first budget in 2019, and then moved onto Congress, where he signed onto the cuts in Obamacare subsidies that are driving up the costs of insurance for so many Wisconinites today. He has earned a hammering for this, and he should be allowed nowhere to hide from it.
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