Medicaid Projected to End Year with Surplus

On Dec. 30, 2016, the Department of Health Services released an update on the Medicaid budget for the current 2017 fiscal year. DHS reported to the Joint Finance Committee (JFC) that they project a $312.5 million balance in general purpose revenue (GPR) Medicaid dollars. The all-fund balance, including GPR, federal, program and segregated revenues, is projected to end the year with $744 million.

In September, DHS estimated the Medicaid account would end the year with a slightly lower GPR balance of $268.1 million. DHS cited reasons for the below-budget expenditures, including a favorable federal matching rate, lower enrollment and growth, and decreases in nursing home utilization. Despite the downward trend, DHS Secretary Seemeyer pointed out in the letter that FY 17 Medicaid expenditures are roughly three percent higher than FY 16.

The state’s positive Medicaid account was recently mentioned by the governor in his State of the State Address. The governor highlighted his decision to not take the federal Affordable Care Act (ACA) expansion funds and compared Wisconsin to Minnesota. The governor stated that “[Wisconsin] has a modest surplus in Medicaid while covering everyone living in poverty.”

The governor’s comments come after his recent letter to Congress pushing for Medicaid block grants and for quick action on “repeal and replace” of the ACA. The governor requested “maximum flexibility through block grants,” and argued block grants will allow states to “design innovations that work best for our citizens.”

The governor’s letter highlights the enormity of the issue and the impact on states if Congress moves forward as expected. In the meantime, it is certain that Medicaid will continue to be a hot topic both nationally and in Wisconsin as the legislative session moves ahead.