Medicaid is projected to end the biennium with a $1.2 million surplus in state dollars, according to a recent report from the Department of Health Services (DHS), though earlier estimates had predicted a $29.4 million surplus.

The revised projection reflects higher-than-expected rate increases for managed care programs—over 8% for long-term care organizations and 5.7% for BadgerCare Plus and SSI Managed Care insurers, compared to the budgeted assumptions of 3% and 2%, respectively. DHS also cited increased spending on hospitals, nursing homes, and prescription drugs in fee-for-service categories.

According to DHS, while Medicaid enrollment has decreased to 1.2 million as of November 2024, down from 1.5 million in May 2023 due to the end of federal continuous enrollment requirements, current members are utilizing services at higher rates, contributing to the updated expenditure trends.