State’s Medicaid Program Projected to End Fiscal Year with Surplus

Despite an unexpected pandemic, Wisconsin is projected to end the current fiscal year on June 30 with a $614.8 million general fund surplus.

On January 4, 2021, the state Department of Health Services (DHS) sent the legislature’s Joint Finance Committee the latest update on the overall condition of the state’s Medicaid program. In September, DHS projected the state would end the fiscal year with a $289 million GPR surplus.

DHS notes that the growth in projected surplus is primarily due to increased federal match (FMAP) for Medicaid. The state continues to receive a 6.2 percent FMAP increase for Medicaid benefits. This FMAP bump is a result of the federal Families First Coronavirus Response Act (FFCRA) passed last spring and is in effect in all calendar quarters of the federal COVID-19 public health emergency. Recently, the federal government extended the public health emergency through April 21, 2020, kicking the increased FMAP out until June.

DHS notes some other smaller reasons for the increased surplus, including the availability of updated enrollment trends and utilization data. DHS states that while Medicaid enrollment was “slower than projected” overall, there was faster growth within certain eligibility groups than what was expected. Actual December 2020 full-benefit Medicaid enrollment is expected to be 1,246,721, opposed to the projected enrollment of 1,265,589. DHS also recognizes that the Medicaid program has experienced lower utilization trends across several program areas, including prescription drugs, hospitals and managed care.