A Summary of the Governor’s Proposed Budget for Health Care

March 1, 2017

Budget Limits Public Assistance Eligibility, but is Probably Only A Start

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Governor Walker’s 2017-19 budget bill proposes many new requirements for participation in public assistance programs. However, relative to his previous budgets, the health care portion of the latest budget bill proposes relatively modest changes in health care funding and policy. Although the bill contains a few significant changes in BadgerCare and Medicaid policy, it’s likely that much more substantial changes will be debated later this year, after Congress considers proposals that could radically transform Medicaid.

Medicaid Cost Growth Slows

healthOne bit of very good news over the last year has been that Medicaid spending has increased by only about half the amount anticipated. That has freed up state savings that are boosting the state budget balance, and has also contributed to a much smaller than usual increase in the projected spending in the upcoming biennial budget.

The bar graph illustrates that although the Governor has budgeted an increase of $279 million in the state share of Medicaid spending for the next two fiscal years, simply to maintain the status quo, that’s a far smaller increase than the state has needed to make in the past three budget bills to maintain the base level of services. The slowing growth reflects recent reductions in BadgerCare caseloads and lower-than-expected increases in costs per participant.

Work Requirements for Some Medicaid Recipients

The public assistance changes proposed by the Governor include a requirement for several programs that non-elderly, able-bodied adults must either be working or participating in a work training program. The proposed budget directs the Department of Health Services (DHS) to seek a federal waiver that could impose a similar requirement upon childless adults in BadgerCare (although a follow-up change to the statutes would be needed). Advocates are very concerned that such a requirement would deny access to essential health care services for many people who face challenges that keep them from maintaining steady employment, such as mental illness, addiction, drivers licenses that have been suspended for failing to pay fines, and lack of child care for the available work shifts

The bill also recommends changes in the work requirements and premiums for the Medicaid Purchase Plan (MAPP). MAPP is a work-incentive program that enables people with disabilities who earn more than 100% of the federal poverty level (up to 250% of FPL) to access needed Medicaid services and supports. The proposed changes are the culmination of long deliberations with advocates, who now support the revisions.

Some Targeted Increases for Children’s Health Care

The Governor is proposing a number of changes relating to children’s health. These include:

  • An increase of nearly $16 million of state funds over the next two years to eliminate the waiting list for long-term supports for children with developmental disabilities, physical disabilities, or severe emotional disturbances;
  • A $1 million dollar increase in funding to expand the Child Psychiatry Consultation Program. CPCP seeks to alleviate the significant shortage of child and adolescent psychiatrists in the Milwaukee area and rural northern regions of Wisconsin by providing primary care providers access to: mental health education; a referral support system for pediatric patients; and a daily case consultation for primary care providers through email or phone with a child psychiatrist, psychologist, or mental health coordinator;
  • A little over $6 million increase through School Mental Health Initiatives to help improve access to mental health services for students in Wisconsin by: increasing the availability of social worker services in schools, funding grants for school-linked mental health services, and helping to train school personnel in mental health first aid and trauma-informed care;
  • About $1.2 million of state funding to establish a children’s crisis treatment and stabilization facility to assist children who are in crisis or requiring short-term crisis stabilization; and
  • Updating the definition for lead exposure and increasing reimbursement for lead investigations.

Other Health Care Measures

The Governor is proposing a $27 million increase in state Medicaid funding to support 2% per year increases in the rates for personal care workers and also in nursing home provider rates. Although those small rate increases are welcome, they fall far short of what is needed. The “Wisconsin Budget for All” proposal endorsed by WCCF and many other advocacy groups recommended a $70 million boost in state funding to help support the long-term care workforce.

The Governor is recommending a number of increased investments to improve mental health treatment in the corrections system. In addition to those initiatives, which would cost about $6.2 million in new state funding, the budget proposes $3 million to increase services to OWI offenders.

The budget counts on a couple of sources of enhanced federal funding, some of which may be at risk. For example, the budget bill assumes that Congress will continue the much higher reimbursement rate authorized by the Affordable Care Act (ACA) for the Children’s Health Insurance Program (CHIP). Wholesale repeal of the ACA would reduce that rate by 23 percentage points, which would create a very large hole in the BadgerCare budget. In addition, the Governor recommends a major investment to procure a new Medicaid Management Information System, which is the state’s multipayer system to support the Medicaid program. More than $76 million of the proposed $87 million for this project would come from federal Medicaid funds for information system upgrades.

Over the coming months, Congress will vote on major changes to the ACA and will also debate radical changes to the structure and financing of Medicaid. Depending on the outcome of those debates and other potential cuts to the federal budget, state lawmakers may need to revisit the Medicaid budget later this year, and wide-ranging changes to reduce eligibility or services might be on the table.

Jon Peacock