Perhaps it’s unrealistic to think that the $93 million Medicaid shortfall will prompt current lawmakers to reconsider their decision to reject the enhanced federal funding. But is it too much to expect that they will at least provide some insights on the plans to close that budget hole before they enact a special session bill that uses every dollar of the projected $912 million surplus?
Tax Plan Increases Red Ink in Next Budget and Leaves Holes in This One
Governor Walker conceded to reporters that his new tax cut proposals will increase the red ink in the 2015-17 state budget by about $100 million – meaning that lawmakers will have to grapple with a structural deficit of more than $800 million as the state goes into the next budget cycle.
According to initial statements to the press corps, his proposal includes a $406 million reduction to property taxes, a $98 million cut in personal income taxes, and the use of nearly $323 million to adjust income withholding schedules (which costs the state up front, but reduces the subsequent refunds the state owes to income tax filers). Another $100 million or so will be put into the state’s rainy day fund.
The deeper structural deficit is likely to be the most contentious aspect of Walker’s plan among Senate Republicans, but it is just one of many reasons why I think his proposal is extremely disappointing. Read more
A big jump in state revenue that will be announced soon gives lawmakers an excellent opportunity to invest in Wisconsin’s economic future and to put the state on a sounder fiscal footing by filling budget holes.
Bill Implements Agreement between DHS and Federal Officials
The Joint Finance Committee announced today that it is adding a new BadgerCare bill to the committee’s January 8th agenda. As I explained in a Dec. 31 WCCF blog post, an agreement reached by the Dept. of Health Services (DHS) and federal officials requires a few changes to the Special Session bill that was signed into law shortly before the holidays.
- The new federal standards relating to income and family size (referred to as Modified Adjusted Gross Income or MAGI) will be applied to new applications from parents and caretakers beginning on Feb.1 (rather than April 1).
- The reduction in eligibility to 100% of the poverty level will also apply to new applicants on Feb. 1, (but neither of these changes will apply until April 1 to people who enroll in BadgerCare before Feb 1).
- The improvement in health care benefits for kids over 200% of the poverty level – from replacing the current Benchmark plan with Standard plan benefits – will also take place in February rather than April.
$900,000 per Month Increase in DOC Costs Is One of Several Unintended Effects
Rather than accepting enhanced federal Medicaid funds, the Governor proposes to pay for a 3-month delay in BadgerCare eligibility reductions by also delaying positive aspects of the budget bill, including the expansion of coverage for adults who don’t have dependent children. Obviously, the most disappointing aspect of financing the bill in that way is that the Governor is breaking his promise not to create a coverage gap for low-income childless adults. Another smaller and much less obvious problem is that the Special Session bill being considered by the Joint Finance Committee on December 2nd creates a $2.8 million GPR hole in the Department of Corrections budget.
The expansion of coverage to include adults without dependent children is projected to save the DOC about $900,000 per month by picking up a significant portion of the cost of hospitalizing inmates. Read more
Wisconsin has been reducing investments that give families access to high-quality child care, a move that will hurt children’s school-readiness and success in later life.
There are a lot of ways in which America’s free market health care system boosts cost to levels far in excess of the costs anywhere else in the world, even though Americans aren’t healthier, and don’t appear to be getting the best health care. Most of those ways are perfectly legal; others not so much.
Once in a while a health care corporation that is exploiting the opportunities to maximize profit in unethical or illegal ways is called on the carpet and forced to pay restitution for their shady exploits. There have been two examples of that in the last week or so, and both could help Wisconsin fill a hole in the state’s Medicaid budget.
Last week the U.S. Department of Justice announced that Johnson and Johnson will pay $2.2 billion to settle a lawsuit related to deceptive marketing and distribution of two antipsychotic drugs, Risperdal and Invega. The drug company misrepresented what the drugs should be allowed for, and allegedly paid kickbacks to doctors and agencies to make sure their drugs were prescribed for certain off-brand purposes. Read more
Rates in the Marketplace in Wisconsin seem to be considerably higher than those in Minnesota, and it’s important to understand how the choices states made about Medicaid eligibility are affecting the rates charged by insurers participating in the Marketplaces.
Many Wisconsin residents are still feeling the effects of the recession, according to a new county-level analysis released today by the Wisconsin Council on Children and Families.
The income of a typical Wisconsin household is still significantly below what it was in 2008, according to the analysis. In 2012, a typical Wisconsin household had $51,000 in income, compared to $55,600 in 2008. If household incomes had stayed at 2008 levels instead of declining dramatically during the recession, a typical Wisconsin household would have earned an additional $14,700 between 2008 and 2012, compared to what it actually earned.
The WCCF analysis includes 21 county fact sheets that outline how residents of each county are faring with regards to poverty, income, and health insurance coverage. The fact sheets include comparisons to the state and national level, and include recommendations for making investments that will help Wisconsin residents lift themselves out of poverty and get access to health insurance. Read more
Growth in Per Capita Income Is Expected to Cause $52 Million Increase in Wisconsin’s Share of Medicaid Spending
Wisconsin Share and Fluctuations in Cost-sharing Would be Reduced if State Took Enhanced Medicaid Funding
Wisconsin Health News reported this morning that our state will probably have to spend $52 million more from state General Purpose Revenue (GPR) because of a drop in the federal share of Medicaid spending (known as the Federal Medical Assistance Percentage, or FMAP). A Legislative Fiscal Bureau (LFB) memo issued yesterday estimated the increase in the Wisconsin share, based on a reestimate of the FMAP in FY 2015 by an organization called Federal Funds Information for States (FFIS). The reduced federal share results from per capita income growth in our state.
It will be interesting to see if state officials use the reduction in federal funds to argue that it’s perilous to take Medicaid dollars, so it was wise not to accept the enhanced federal funding under the Affordable Care Act (ACA). However, I would argue just the opposite. Read more