DHS released an updated Medicaid budget projection showing the program is now expected to face a $263.5 million GPR shortfall by June 30, 2027, the end of the 2025–27 biennium. This is 2.7% above the spending levels assumed in the enacted budget and approximately $50 million higher than the $213.2 million deficit projected earlier this year.

In the department’s memo to Joint Finance Committee, DHS Secretary-designee Kirsten Johnson pointed to continued healthcare cost growth, rising utilization, and broader uncertainty related to federal policy and economic conditions as key drivers behind the revised estimate.

The updated projection is primarily tied to higher-than-expected costs in several areas, including:

• increased enrollment in long-term care programs (+$33.3 million GPR)
• greater utilization of nursing home care and increased bed-days (+$79 million GPR)
• faster-than-anticipated growth in the Children’s Long-Term Support program (+$54 million GPR)
• higher pharmacy costs driven by utilization and lower rebates (+$62.2 million GPR)
• increased spending through community health centers (+$38.7 million GPR)

DHS said it will continue taking steps to manage the program as efficiently as possible while preserving access to care for more than 1 million Wisconsin Medicaid members.