By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds
The Joint Finance Committee votes Thursday, May 21, on a wide range of Medicaid issues, including whether to expand BadgerCare and save upwards of $345 million that could help prevent deep cuts in higher education and other parts of the budget. The most frequent argument made by conservatives against capturing that federal assistance is that we shouldn’t accept federal funding that might not be secure. However, if you were carefully watching the Finance Committee’s budget votes last Thursday you would have gotten a very different perspective on the willingness of the majority party to accept federal funding.
There were at least two times last Thursday when the JFC voted to amend the Governor’s budget in ways intended to capture or utilize more federal funding. In one case (motion #345) the committee unanimously approved new standards that will make it easier for the Department of Children and Families to close child support cases. Read more
Increase in Childless Adult Enrollment Boosts Costs and Potential Savings
The number of childless adults participating in BadgerCare is now expected to be about 6,800 per year higher than the budget bill assumed, which means the cost of not accepting enhanced federal assistance for covering that population is also considerably higher.
A paper issued by the Legislative Fiscal Bureau this afternoon contains the new enrollment assumptions for childless adults and other Medicaid groups. By using those figures to do some quick calculations, I estimate that the state would save at least $23 million more than the Fiscal Bureau calculated back in February, when it said that by expanding BadgerCare and accepting the increased federal funding Wisconsin would enjoy a net savings of $345 million during the 2015-17 biennium. (My calculation is based just on the increased childless adult caseload and assumes that other factors, such as the cost per individual, haven’t changed since February.)
[May 21 update: LFB figures released this afternoon show that the net increase in savings was a little smaller than I calculated, which suggests that other variables also came into play. Read more
Involving Stakeholders in Family Care Changes Could Serve as a Model for Other Budget Improvements
Republican leaders on the Joint Finance Committee announced a significant improvement in the state budget today – or at least in the process for developing and approving one part of the budget, the changes relating to community-based long-term care for seniors and people with disabilities. Let’s hope that similar improvements are made in other parts of the budget that have comparable problems.
One of the very troubling things about the Governor’s budget bill is that it contains sweeping changes that circumvent the usual processes for involving stakeholders and advisory committees in the development of public policy proposals. Among the numerous examples of that, perhaps the most troublesome was the dramatic set of changes to community based long-term care provided through the Family Care and IRIS programs. The development of those changes totally excluded the usual advisory role of stakeholders, and was even a surprise to the agency that has been administering those programs. Read more
National Analysis Illustrates Budget Benefit of Expanding BadgerCare
From a budget perspective, no other state has nearly as much to gain as Wisconsin from expanding Medicaid coverage for low-income adults. That fact is vividly illustrated by the graph below, which is from a report issued last week by Kaiser Commission on Medicaid and the Uninsured.
Among the 21 states that have yet to expand Medicaid to cover low-income adults up to 138% of the federal poverty level, all the rest would have to spend a little more state funding (before accounting for indirect benefits), whereas Wisconsin is the only state that would have a large savings. The Kaiser Commission’s report concluded that by expanding BadgerCare and qualifying for additional federal funding, “Wisconsin would see its state spending on Medicaid decline by nearly 5 percent.” The other 20 states that haven’t expanded Medicaid yet would achieve larger gains in health insurance coverage, but the state share of their Medicaid spending would increase slightly, in the range of 2% to 6%. Read more
Cost Growth Underscores the Value of Accepting Federal Funds for BadgerCare Expansion
The latest quarterly report on the state Medicaid budget, issued this week by the Department of Health Services (DHS), reinforces our concerns about the choice of Wisconsin lawmakers to spend substantially more for BadgerCare and insure far fewer people than if the state expanded eligibility to cover additional low-income adults.
The new report reveals a $24.8 million net increase in projected Medicaid and BadgerCare spending in the current fiscal year, relative to what DHS estimated just three months ago. Despite that increase in program costs, the department says the Medicaid budget remains in balance because they plan to more than double the amount of drug settlement funds allocated for the Medicaid budget. (That funding comes from payments by manufacturers to settle lawsuits alleging they improperly charged for medications used by Medicaid recipients.)
The jump in Wisconsin’s Medicaid costs does not come as a big surprise – considering the rapid growth in BadgerCare enrollment of childless adults, which is now almost 60% above the level that DHS originally expected it to reach at the end of the current fiscal year. Read more
Number of Childless Adults in BadgerCare Jumps by More than 7,000 in February
The latest open enrollment period for the federal insurance Marketplace caused tens of thousands of Wisconsinites to apply for health insurance – sharply increasing the number of people signing up for subsidized plans and also causing a big jump in BadgerCare enrollment. Those trends are a major success story for the Affordable Care Act, but they pose a challenge for state lawmakers.
The number of childless adults in BadgerCare has jumped by more than 10% since December, which significantly increases the program’s cost. However, that unanticipated surge in enrollment also substantially increases the amount the state could save if state lawmakers accept the federal funding that would pay almost all of the cost of covering childless adults. Read more
BadgerCare Cuts Have Made Wisconsin More Reliant on the Federal Marketplace
The latest Supreme Court case relating to the federal health care reform law is particularly important for Wisconsin. Our state has a lot at stake because of the decision to rely on the Affordable Care Act (ACA) to make subsidized private health insurance available to tens of thousands of people formerly eligible for BadgerCare. In addition, as the Star Tribune reported, Marketplace premiums are higher in Wisconsin than in most other states, which makes subsidies more important here.
Oral arguments in the case, King vs. Burwell, were heard today. The case calls into question whether low and moderate income people using the Federal Exchange (Marketplace) to purchase health insurance are allowed to receive the subsidies that currently help them pay for that insurance coverage.
The plaintiffs argue that there is language in the ACA that seems to say subsidies are available only to people living where Marketplaces are “established by the state.” If their argument is accepted by the Court, eligibility for the subsidies would end in Wisconsin and up to 36 other states (unless they move quickly to establish their own insurance Marketplaces). Read more
The proposed budget bill contains a very substantial increase in state funding for Medicaid programs in Wisconsin, including BadgerCare, but it also makes a number of negative changes to BadgerCare and SeniorCare, as well as to other health care services for the elderly and people with disabilities.
A new Wisconsin Budget Project summary of the major health care portions of the budget bill explains that the largest factor in the increased spending is the much greater-than-anticipated growth in BadgerCare participation among adults without dependent children. The following chart uses Legislative Fiscal Bureau data to illustrate the comparative role of different parts of Medicaid in boosting the cost of maintaining current health care programs by $643 million during the 2015-17 budget.
As that bar graph shows, the state’s share of spending for childless adults is expected to grow by almost $383 million over the next two years, relative to the amount appropriated for the current fiscal year. Read more
Iowa-based Plan Offers Option to Mitigate Deep Budget Cuts
A bill unveiled today offers a compromise on how to expand BadgerCare, while helping to avoid or scale back some of the deep cuts in the budget bill. The proposed legislation could save an estimated $241 million in Wisconsin’s 2015-17 budget, while expanding BadgerCare to an estimated 81,000 adults between 100% and 138% of the federal poverty level.
The compromise legislation, which is now being circulated for cosponsors by Representative Daniel Riemer (D – Milwaukee) and Senator Jon Erpenbach (D – Middleton), is similar to the Medicaid expansion plan being implemented in Iowa because the new BadgerCare coverage for adults over the poverty level would be private insurance plans purchased through the health insurance exchange or “Marketplace,” rather than the current public plan for BadgerCare recipients. This compromise would essentially continue the sort of coverage that adults over the poverty level can now get through the Marketplace, but the subsidies would be delivered through BadgerCare, rather than through the federal premium tax credits. Read more
Now that the Governor’s budget bill has been introduced, we can begin to see the painful consequences of policy choices that state lawmakers made last session, such as enacting large tax cuts on the basis of overly optimistic revenue projections. But the deep cuts in areas such as the UW System budget aren’t inevitable if the state reconsiders the rejection of federal Medicaid funds, stops digging the budget hole deeper by passing more tax cuts, and closes tax loopholes.
It will take quite a while to carefully dissect and analyze the Governor’s budget bill, but here are some initial comments relating to major items in his plan – to the best of my abilities in the very brief time I’ve had to study the Dept. of Administration (DOA) documents. [NOTE: After reviewing the bill more carefully, I’ve added an update in the portion about school funding, because the blow to public schools is much greater than I initially thought.] Read more