Medicaid’s debt has decreased by millions, according to officials at the Wisconsin Department of Health Services.

A letter describing the shrink in the shortfall was sent from Dennis Smith, secretary of the Department of Health Services, to Representative Robin Vos, R-Burlington, and Senator Lena Taylor, D-Milwaukee, who are both members of the Legislative Joint Committee on Finance.

According to the letter, one year ago Medicaid was predicted to have a $554.36 million deficit for 2011-2013. However, Medicaid is now predicted to have a $35.49 million deficit for this period.

Some causes for this significant reduction of the deficit include $27 million in federal aid given in response to claims the DHS resubmitted in order to match the dollar amount they needed.

According to the letter, the other causes are a decrease in the Family Care enrollment cap and various changes in the BadgerCare program for non-pregnant and non-disabled adults that have incomes 133 percent above the poverty level.

The changes to the BadgerCare program raised the premiums, restricted re-enrollment if premiums were not paid and ended retroactive eligibility. Retroactive eligibility allowed payment to individuals who did not request financial assistance until after they received care.

Claire Smith, spokesperson for the DHS, said all of these changes have created a surplus and they will continue to work toward their goal of eliminating the deficit entirely.

“We are all about having a healthy Medicaid program in order to help the residents of Wisconsin. To do so, we must work within our means and stay on budget,” Smith said.

John Peacock, research director of the Wisconsin Council on Children and Families, said the reduction of the deficit is a welcome development.

“It is really not all that surprising.” Peacock said.

Peacock added part of the savings came from disqualifying lower income families from BadgerCare. According to Peacock, 21,000 families have lost coverage from BadgerCare.

There has also been less participation in the Family Care program due to the enrollment cap, Peacock said. Peacock said they support some of these cost savings, but are not in support of families losing out on BadgerCare.

“The Medicaid Budget will almost be in balance by the end of the year,” Peacock said. “The Department [of Health Services] has done more than it needed to do.”

Peacock said proposals to further narrow the services that BadgerCare provides to Wisconsinites have been brought forward but have not been approved.

He said the council believes Medicaid has had enough savings and no further measures need to be taken.

But Peacock said despite their concern that BadgerCare has eliminated too many people, there is positive side to all of the changes that have been made by the DHS.

Peacock said from the perspective of a young adult, BadgerCare has improved in that they are now able to remove their waiting list for young adults without kids.

“Now that the Medicaid budget is in better shape they can enroll more people,” Peacock said. “This is a good thing for kids and families.”