A surge in the number of childless adults enrolled in BadgerCare is increasing the total cost of maintaining existing coverage and is thereby increasing the price of not tapping Wisconsin’s share of federal funding for Medicaid expansions. The large jump in enrollment of childless adults who are below the poverty level is one of the factors contributing to a $24.8 million increase in the state share of projected Medicaid spending in Wisconsin during the current fiscal year.

The latest quarterly Medicaid report, which was released this week by the Department of Health Services (DHS), says that despite the cost increase (compared to the projection made three months ago), DHS expects to balance the Medicaid budget by increasing the amount of drug settlement funds allocated for that purpose.  (That funding comes from payments made by manufacturers to settle lawsuits alleging they improperly charged for medications used by Medicaid recipients.)

A new Wisconsin Budget Project Blog post examines the increased spending and the consequences of filling the Medicaid budget hole with a short-term revenue source, rather than tapping federal Medicaid expansion funds to finance the cost of covering childless adults. That blog post notes the irony of using one-time revenue to temporarily cover the cost increase, even as some lawmakers contend that Wisconsin should not harness the Medicaid expansion funding because Congress and the next President could possibly end it a couple of years from now.

Jon Peacock