Experts weigh in on budget’s healthcare impact
Lawmakers raced to finish the state’s 2025-27 budget last month before a federal policy shift shut down a key Medicaid funding stream for Wisconsin hospitals. The two-year spending plan triples the hospital assessment to 6 percent of revenue, allowing the state to draw down additional federal funds. It also spends $1.4 billion more in state money to continue funding current Medicaid programs.
Wisconsin Health News assembled a virtual panel of experts this week to break down what the budget means for healthcare. Speakers included Senate President Mary Felzkowski, R-Tomahawk, who voted against the budget. Joining her on the panel were:
- Lisa Hassenstab, Public Policy Manager, Disability Rights Wisconsin
- Jeremy Levin, Director of Advocacy, Rural Wisconsin Health Cooperative
- Michael Pochowski, CEO, Wisconsin Assisted Living Association
Edited excerpts from the conversation are below.
Watch the event on WisconsinEye, YouTube and Facebook.
WHN: What will the increased assessment mean for hospitals?
Levin: We’ll see, once everything goes through the formula, about an additional $740 million annually, which was about half of the underpayment of about $1.6 billion that hospitals were facing in this state from Medicaid … It puts us in a much stronger position going into a very uncertain time with Medicaid’s future at the federal level. A lot of things are going to happen in 2027 and afterwards, and there’s a lot to be determined, but we’re on a stronger footing.
WHN: Sen. Felzkowski, you’ve been critical of the hospital assessment change and voted against the budget. What are your concerns?
Felzkowski: My largest reason for voting no is there was not one reform in that budget — not one — to actually help those employers and my constituents deal with the high cost of healthcare that we’re seeing in this state. And I just think it’s wrong. We are balancing our Medicaid budget — which was $1.43 billion cost-to-continue, and that means changing nothing — and we are balancing it on the backs of the constituents of this state, with their high healthcare costs, as well as employers.
WHN: What parts of the budget do you support?
Felzkowski: The budget hit the mark on a lot of things, and that’s why it was a really tough vote to vote against it …
Around dental care, we put $430,000 (a year) into an increase for Marquette (University School of Dentistry.) They do a real good job on dental services to the underserved. (There were) grants to dental clinics for low-income patients. One thing that we did that I’m very happy about is sedation dentistry. We have a lot of our special needs patients that have to be sedated in order to receive dental care, and we put $2.25 million all funds into that.
So, there are a lot of good things that were happening in this budget, but I just couldn’t get past that one issue.
WHN: Mike, the budget included funding for a fee schedule for home and community-based services. Why is that important?
Pochowski: It’s been a lifeline for our members, particularly because it sets at least a minimum floor in terms of what the reimbursement rate should be to providers. So in the past, it’s always just been strict negotiation with the managed care organizations in terms of what that reimbursement should be. When this minimum fee schedule was put into place, it really set that floor. So now providers know exactly at least what their reimbursement should be going forward.
Along with that, prior to the fee schedule going into place, the wage assumptions for caregivers in the Family Care program was $13.02 per hour. And so with this new program, that’s now been bumped up to $15.25 per hour, which is great. We really appreciate that. It’s definitely still not where it needs to be. We’re seeing across the state, caregiver wages are anywhere from $17 to $20 per hour.
WHN: Lisa, how will this budget impact those with disabilities?
Hassenstab: We would have loved to have seen additional investment in mental health. We saw a cost to continue-ish in school-based mental health services. That’s an area where we really would have loved to have seen additional resources.
But, there were definitely some good wins. There were some rate increases in terms of home healthcare and substance use disorder programs that are going to be really helpful for folks.
One of the challenges that we really see too, in terms of long-term care, is with the children’s long-term care support program. It is really challenging to find providers in a lot of areas of the states, and a lot of that comes back to reimbursement rates. Services are really uneven across the state in terms of kids and families that are trying to access those long-term care programs for children before they turn age 18.
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