DHS Improves Medicaid Projection in Second Quarter Report

In a recent report, the Department of Health Services (DHS) provided a much more positive projection of the state’s Medicaid program for the current biennium (2017-19). DHS projects the Medicaid program will end the biennium with a balance of $9.6 million general purpose revenue (GPR) and $23.4 million all funds. In September, DHS estimated the state would end in the red – with a negative GPR balance of $7.9 million and negative $19.3 million all funds balance.

DHS states in the report to Joint Finance Committee Chairs, that the improved projection is due to slower than expected enrollment and an uptick in manufacturers’ rebates for prescription drugs. These positive trends have offset higher than budgeted costs in other areas – including HMO rates for BadgerCare Plus and cost settlements for Comprehensive Community Services.

DHS explains that they continue to assume that Congress will reauthorize the Children’s Health Insurance Program (CHIP). Authorization for CHIP expired on September 30, 2017 and in December, funding was extended through March in a continuing resolution.

Despite the positive report, DHS cautioned that it is still early in the 2017-19 biennium and this projection is based upon 6 months of data. As with every Medicaid estimate, fluctuations are expected in the future.