Wisconsin Increased State Hospital Assessment Tax

The state budget enacted by Governor Evers boosted annual hospital tax collections to $1.51 billion to capture federal funding.

Updated on Oct. 4, 2026 in Healthcare

Isometric editorial illustration of a clean, geometric hospital facade with square windows, representing institutional state medical infrastructure. — Governor Tony Evers signed the 2025-27 Wisconsin state budget, which increased hospital assessment tax collections to $1.51 billion to leverage federal Medicaid funding. AI Illustration. Upload story photo >

Live Poll

Do you believe rising hospital taxes will lead to higher medical costs in your community?

Governor Tony Evers signed the 2025-27 state budget on July 3, 2025, which raised the annual hospital assessment tax to $1.51 billion from $420 million. This increase allows the state to leverage $1.22 billion in federal Medicaid matching funds while retaining $298.3 million for state costs.

Why it matters

The tax hike is designed to maximize federal support for Medicaid services throughout Wisconsin. By increasing the assessment, the state secures significant federal dollars that help offset the cost of providing care to Medicaid patients.

The program brings in $1.22 billion in annual federal matching funds, providing a net gain of $919 million for hospitals. Participating facilities receive a current payment of $7,489 per Medicaid stay, up from $4,580 previously.

The players

Tony Evers

Tony Evers is the Governor of Wisconsin who signed the 2025-27 state budget into law.

Ascension All Saints

Ascension All Saints is a healthcare facility operating in Wisconsin that experienced a significant increase in its annual tax assessment.

The details

Hospitals pay the state a set percentage of quarterly patient billings, which the state then distributes back as Medicaid payments bolstered by federal money. At Ascension All Saints, the tax liability surged from $5.13 million in 2024-25 to $17.82 million in 2025-26, reflecting the higher assessment rate.

Wisconsin established the hospital assessment tax in 2009.
Governor Tony Evers signed the state budget increasing the tax on July 3, 2025.
Ascension All Saints paid a $17.82 million tax bill for the 2025-26 period.
Federal officials approved the state's 2026 hospital tax plan on May 15, 2026.
Mandated reductions in Medicaid payments begin on January 1, 2028.

Market Landscape

This tax increase expands upon the Wisconsin hospital assessment tax established in 2009 to leverage larger federal Medicaid matching contributions. It forces hospitals to balance higher immediate tax outlays against the return of federal payments, a cycle that remains a staple of state healthcare financing.

For patients, the tax structure supports the continued availability of Medicaid-funded services at local hospitals in regions like Racine and Kenosha counties. Changes in hospital tax bills and Medicaid payment rates may influence how facilities manage resources for the 24.7% of billings currently attributed to Medicaid.

The takeaway

The state's hospital tax strategy relies on capturing federal dollars to sustain Medicaid services, though long-term financial shifts are expected to begin in 2028. Hospitals must navigate these fluctuating payment cycles while managing their share of the mandatory tax collection.