From WisPolitics.com/WisBusiness.com …
— The Trump administration has formally signed off on a higher state assessment on hospital revenues, ensuring the state will avoid missing out on $800 million for the Medicaid fund that had been built into the 2025-27 budget.
Still, the Legislative Fiscal Bureau warned today the Capitol may still need to take steps to shore up the fund with the Department of Health Services currently projecting a $322.4 million general purpose revenue shortfall in the program at the end of the biennium one year from now.
A year ago, lawmakers and Gov. Tony Evers raced to finish the 2025-27 budget before Republicans’ One Big Beautiful Bill could be signed into law because the legislation placed new restrictions on states using their assessments on hospital revenues to generate additional federal matching dollars.
The state’s increased assessment was designed to generate an additional $800 million, though it wasn’t clear the money would come through until the Centers for Medicare and Medicaid Services formally approved the change.
LFB wrote in today’s memo CMS had signed off, and the state DHS published a notice June 29 that the higher hospital assessment had taken effect.
Separately, DHS Secretary Kirsten Johnson sent a letter last week to Joint Finance Co-chairs Mark Born, R-Beaver Dam, and Howard Marklein, R-Spring Green, that cited several factors for the projected shortfall in the Medicaid program. That includes increased projected costs for prescription drugs, higher payments to hospitals and larger amounts of federally required payments for Medicare beneficiaries enrolled in Medicaid.
In today’s LFB memo, the agency noted that the Evers administration’s “options for taking actions to significantly reduce benefit costs are somewhat limited” with program eligibility and benefits established by state and federal law.
“Even if the Department does reduce the imbalance through payment changes, these measures may not be sufficient to fully resolve the shortfall, and budget adjustment legislation may need to be considered prior to the end of the biennium,” the agency wrote.
— Madison-based M3 Insurance is putting a spotlight on rising healthcare costs for employers, noting its client base saw a 7.46% increase this year.
The insurer recently released the 2026 edition of “Momentum: An M3 Employee Benefits Trend Report.” It shows its clientele of about 2,000 employers across the country are currently spending $17,042 per employee per year on healthcare.
While the year-over-year change is smaller than last year’s average increase of 8.64%, this “meaningful moderation” is well above the rate of inflation and follows years of rising costs, report authors wrote. They note that increase being applied to the larger base spend is “a very different problem” than it would have been just five years ago.
Meanwhile, utilization is on the rise for mental and behavioral health services, treatment of musculoskeletal conditions and chronic conditions, the report shows. But the landscape is dominated by specialty drugs, making up 51.5% of total spending among M3 clients, the report shows.
“For the first time, the majority of what employers are spending on pharmacy is being driven by a relatively small number of high-cost medications,” authors wrote.
Importantly, this category doesn’t include GLP-1 weight loss drugs. Authors note the cost pressure associated with these treatments along with the rising share represented by specialty drugs “are two separate and compounding challenges employers are managing simultaneously.”
Though these drugs offer “genuine clinical benefit” for diabetes and weight management, they’re making up 3-5% of total healthcare spending and up to 20% of prescription drug spending for these employers.
See more coverage of the report.
See the release below.
— The USDA is providing $1.125 million to the city of Lancaster in Grant County to renovate a fire and rescue station that also houses emergency medical services.
The project includes heating, cooling and plumbing upgrades for the 30-year-old building, as well as updating its power distribution system and backup power supply. It will also add an elevator, emergency lighting, decontamination laundry and showers, an office area and more.
See more in the release below.
For more of the latest news on the state economy and Wisconsin businesses from startups to industry leaders, sign up today for a free two-week trial of the daily morning news report from WisBusiness.com.
Top Stories
– Obamacare rolls shrank dramatically in many states over the past year, new federal data shows
– Where Obamacare enrollment is plummeting
– Copay Assistance Is Meant To Defray Patient Drug Costs. Some Insurers Keep It Instead.
– UnitedHealth says most home-health diagnoses were supported in 2025
– ‘Explosive’ diarrhea parasite cases surge as health officials seek source
– Is AI ready to take over your prescriptions? Doctors are wary of Utah’s automated refill program
Press Releases
