Wisconsin’s Medicaid program is projecting a $213.2 million shortfall through fiscal year 2027, driven largely by higher-than-expected enrollment in long-term managed care programs, according to a Jan. 5 report from the state Department of Health Services.
The projected deficit, which represents 2.2% above budgeted levels, has increased since September, when the state projected a $144.1 million shortfall. The department attributed the increase to three more months of enrollment and spending figures, as well as finalized 2026 capitation rates for Medicaid acute and long-term managed care programs.
Enrollment in Family Care and Family Care Partnership, Wisconsin’s long-term managed care programs, is running well above what the state budgeted. The department projects managed care organization enrollment will be 3.4% higher than budgeted by fiscal year 2027. The net impact of higher long-term care enrollment, partially offset by more favorable MCO capitation rates for 2026, is an expected $45 million deficit for those services.
Fee-for-service nursing home expenditures and Children’s Long Term Supports program costs are also running higher than expected due to increased utilization, adding $59 million and $38 million to the deficit, respectively.
BadgerCare Plus and SSI Managed Care enrollment has trended lower than expected in the first six months of the fiscal year. While finalized 2026 HMO rates came in higher than budget, overall managed acute care costs are running better than expected. Lower-than-expected costs for fee-for-service hospitals and other non-institutional care have also helped offset some of the long-term care overruns.
The program is also experiencing unanticipated higher costs for prescription drugs, Medicare buy-in programs, and fee-for-service mental health and substance use disorder services, which together contribute an additional $76 million to the projected deficit.
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