Wisconsin’s Medicaid program is undergoing several developments, including a decline in enrollment, increased funding needs to maintain current services, and potential changes at the federal level that could impact future funding and operations.

Enrollment Changes Following Policy Shift

BadgerCare Plus enrollment fell below 900,000 in March 2025, marking the lowest total since August 2020. This shift follows the phase-out of the federal continuous enrollment policy, which paused disenrollments during the COVID-19 public health emergency. In just one month, enrollment declined by more than 17,000 individuals, with decreases seen among both adults and children. While overall enrollment remains higher than pre-pandemic levels, the return to standard eligibility reviews is expected to continue contributing to enrollment declines in the near term.

Increasing Costs to Maintain Current Services

Despite the declining enrollment, the Governor’s 2025–27 state budget recommends an additional $1.069 billion in GPR to cover the cost to continue Medicaid services. This increase accounts for rising healthcare costs, changes in service utilization, and adjustments in federal matching rates. The substantial investment underscores the financial pressures the state faces in sustaining its current level of Medicaid services.

As part of the state budget process, the legislature’s Joint Finance Committee (JFC) will review the Department of Health Services’ funding request and determine whether to approve, modify, or adjust these recommendations. The JFC’s deliberations will shape how Wisconsin maintains existing Medicaid benefits, provider reimbursement rates, and eligibility standards over the next two years.

Federal Proposals Could Affect Future Funding

In the background of all of this, there are potential federal changes being considered by Congress that could further impact the state’s Medicaid program. Last week, the state’s Medicaid Director held a press conference around a recently released report that modeled how several federal Medicaid policy proposals could impact Wisconsin. These include:

• Per-Person Federal Funding Cap: Replacing the current matching model with a capped amount per enrollee could reduce federal Medicaid funding to Wisconsin by an estimated $6.4 billion to $16.8 billion over ten years, depending on how the cap is designed.
• Work Requirements for Childless Adults: DHS estimates that 52,000 individuals could lose coverage if work reporting rules are implemented. The added administrative costs for staffing and eligibility systems could reach $65.6 million.
• Reduced Federal Match for Administrative Operations: A proposal to lower the federal match rate for administrative functions—such as claims processing, provider payments, and fraud prevention—could increase state costs by approximately $93 million annually.

DHS officials noted the report is intended to provide early data to help inform discussions about the potential impact of federal changes.

Next Steps

As budget negotiations continue, the Joint Finance Committee will play a central role in determining how the state addresses rising Medicaid costs and prepares for potential shifts in federal funding. Medicaid remains a cornerstone of Wisconsin’s healthcare system, and upcoming decisions at both the state and federal levels will help shape its future scope and sustainability.