Health Services Department projects $760 million increase for Medicaid over next two years

The State of Wisconsin Department of Health Services is projecting an increase of $760 million for Medicaid over the next two years, according to the department’s 2015-17 biennial budget request released earlier this week.

The largest portion of the budget involves the Medicaid program, which, under Governor Scott Walker’s entitlement reforms, for the first time provides health coverage to all individuals at or below the federal poverty line, regardless of household composition or age.

Based on enrollment and service utilization trends over the next three years, the projected increase for Medicaid reflects a significant reduction in the base federal match rate that will occur in federal fiscal year 2015 and further projected declines in 2016 and 2017, plus increases in federally required payments for Medicaid individuals served in Medicare.

On a weighted per member basis, the department estimates all funds costs will grow by 1.7 percent in 2015, 4.7 percent in 2016 and 3 percent in 2017, which are all below national health care inflation trends. The federal Centers for Medicare and Medicaid Services projects per capita national health care expenditures will grow on average by 4.6 percent annually from 2014 through 2017.

“That said, health care costs continue to consume an ever larger share of the state budget, creating funding pressures for other state priorities,” wrote Department Secretary Kitty Rhoades in the budget request.

The department’s budget request also continues the investments in mental health services that Walker and the Legislature began in the 2013-15 biennium, which include expanding and improving services, as well as giving support to those suffering from mental illness.

Lastly, the budget request fully funds the statewide implementation of the FoodShare Employment and Training Program. Part of Walker’s $100 million investment in workforce training, this initiative provides able-bodied adults without dependents employment and training services that are said to result in successful competitive employment while promoting economic self-sufficiency.

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