Wisconsin can cover a lot more people at a much lower cost to the state by using the Affordable Care Option option to finance BadgerCare coverage for all childless adults below 133% of the federal poverty level (FPL), instead of the narrower expansion the Governor recommends.
Decision Would Forgo $44 Million in Potential Savings in the 2013-15 Budget
The Milwaukee Journal reported this afternoon that the Governor is expected to announce on Wednesday that the state won’t take the federal funding provided by the Affordable Care Act (ACA) to close the current gap in BadgerCare for low-income adults who don’t have dependent children. From 2014 through 2016, that funding would cover all of the cost of covering newly eligible adults, with the federal share gradually declining to 90%.
Though we are awaiting details, it appears that the Governor will propose adding some coverage for childless adults – with that state paying its usual 40% share of the increased cost. To offset that increase, it appears that the plan will make some parents ineligible for BadgerCare.
Using the ACA opportunity to cover all childless adults up to 138% of the federal funding would make the cuts to parent coverage unnecessary. Read more
Walker Announces $29 Million Investment in Mental Health Care, but Voices Reservations about ACA Medicaid Opportunity
Governor Walker announced Wednesday that his budget bill will make a $28.9 million investment in mental health care during the next two fiscal years. That’s very welcome news. The worrisome news is that the Governor said on his Facebook page late Tuesday that he has reservations about using the opportunity provided by the Affordable Care Act (ACA) to close the gap in BadgerCare, because he believes “long-term funding is highly uncertain.” (See the response to that point by David Riemer of Community Advocates.)
As a side note, Michigan’s Republican Governor, Rick Snyder, doesn’t share Walker’s reservations. An article in the Detroit Free Press reported that at a press conference today Snyder expressed his “unconditional support for an expansion of Medicaid to include about 450,000 more uninsured, low income Michiganders into the program.”
Returning our attention to Wisconsin, Walker said in an address to the WI Counties Association today that his initiative isn’t just a reaction to recent tragedies. Paraphrasing the Governor’s remarks, the WisPolitics Budget Blog wrote that the Governor said that the initiative is “also intended to help expand service and break the stigma for those who seek mental health services.”
His plan will make the following investments in mental health care in the 2013-15 budget:
- $10.2 million for Comprehensive Community Services (CCS)
- $3.7 million for Coordinated Service Teams
- $1.3 million for Peer Run Respite Centers
- Creating an Office of Children’s Mental Health and providing $535,000 for children’s mental health services
- $524,000 in In-home counseling for children
- $12.5 million to open two additional inpatient Forensic Treatment units at Mendota Mental Health.
Bill to Strengthen BadgerCare Unveiled, Fiscal Bureau Memo Calculates Savings
Democrats in the Wisconsin Legislature held a press conference Tuesday urging Governor Walker to follow the lead of several GOP governors who have recently announced that they will seize the opportunity provided by the health care reform law to significantly improve access to health insurance and boost the economies in their states. They will accomplish that by using federal funding to close current gaps in Medicaid coverage. (See our blog post Monday about the announcement made by Gov. Kasich of Ohio, and today’s WCCF post about the Madison press conference.)
Rep. Richards, Sen. Erpenbach and others unveiled a bill called the Strengthen BadgerCare Act. The bill accomplishes what the Wisconsin Hospital Association recently called for: providing BadgerCare coverage to adults below 133% of the federal poverty level (FPL) who don’t have dependent children. A Legislative Fiscal Bureau (LFB) memo released today indicates that Wisconsin would save about $66 million over the first three years (2014 through 2016), including $43.7 million in the 2013-15 budget. Read more
Wisconsin Hospital Association Supports the Move, and Kasich Becomes the Latest Red State Governor to Endorse It
I noted in a WCCF blog post about two weeks ago that math often trumps ideology. The occasion for that observation was the decision of Arizona’s Governor, Jan Brewer, to recommend expanding Medicaid and accepting the funding for that purpose in the federal health care reform law. Ohio has now joined a growing list of states where math is prevailing over ideological resistance to the Affordable Care Act (ACA).
Governor John Kasich of Ohio announced today that he came to the same conclusion as Brewer and plans to use the opportunity provided by the ACA to improve access to health care because it “makes great sense for the state of Ohio.” (Read more here.) Perhaps more importantly, the Wisconsin Hospital Association made it public last Friday that they have also decided that it “makes good fiscal and policy sense” to use the ACA option to close the gaping hole in BadgerCare for low-income adults who don’t have dependent children.
Kasich and Brewer both continue to emphasize that they don’t like the ACA, aka “ObamaCare.” But polling shows that closing the gap in Medicaid is politically popular, and a number of red state governors have agreed that the federal funding is too good a deal to pass up and that preventive health care makes better sense than treating the uninsured in emergency rooms. Kasich’s decision follows the release of a report last week that concluded Ohio would save $1.4 billion from 2014 to 2022 if the state expands Medicaid. Read more
The Department of Health Services says the agency has essentially eliminated the $147 million GPR deficit in the 2011-13 Medicaid budget, which the department had estimated in 2011. But the new report leaves out some significant details and provides little explanation for the latest improvement in Medicaid financing.
Supplemental 2011 Award Adds to New 2012 CHIPRA Bonus
The federal government announced today that Wisconsin is receiving an additional $32 million in bonus awards for the state’s success in improving children’s access to health care through the BadgerCare program. Wisconsin is one of 23 states getting bonuses for 2012 under a portion of the Children’s Health Insurance Program Reauthorization Act (CHIPRA), which provides payments to states that are particularly successful in cutting red tape and removing administrative hurdles to enroll more uninsured children in their Medicaid programs.
If you saw the 2012 bonus awards chart from the Department of Health and Human Services (HHS), you might think that the $32 million figure is a typo, because the chart shows that Wisconsin will receive a 2012 bonus of $23.3 million. That’s correct, but if you study another HHS document you will see that the 2011 CHIPRA bonus is now shown to be $33.2 million, which is $8.7 million more than had previously been announced ($24.5 million). The explanation for the difference is that this fall Wisconsin was awarded a supplemental bonus of $8.7 million for 2011, bringing the total of new federal funds to $32 million. Read more
According to a new report by the Wisconsin Hospital Association, hospitals in our state provided $1.2 billion of uncompensated health care services to their patients in fiscal year 2011, either as charity care ($579.6 million) or as bad debt ($626.8 million). Total uncompensated health care increased by about $110 million, or 10.3%, compared to FY 2010.
Hospitals in Milwaukee County accounted for $357 million of the uncompensated care last year, or 29.6%. However, it’s a significant issue for hospitals all over the state. Among the 148 hospitals included in the report, 57 each delivered more than $5 million of uncompensated health care in FY 2011.
The large amount of uncompensated care helps illustrate the importance of improving access to quality insurance. BadgerCare has slowed the increase in uncompensated care costs compared to what it otherwise would have been during the long and deep economic downturn. That was especially apparent in FY 2010 when the amount of uncompensated care decreased a little, even as the economy was tanking and tens of thousands of Wisconsinites were losing their employer-sponsored insurance. Read more
Figure the Governor Uses Arbitrarily Excludes the ACA’s Enhanced Federal Aid
A PolitiFact article in Sunday’s Journal Sentinel critiques an op-ed column by Governor Walker in the July 12 Washington Post, in which he contended that that the federal health care reform law would “devastate” Wisconsin. PolitiFact analyzes four of the factual assertions in the Governor’s column and rates them as false, concluding that the Governor’s op-ed: “cherry-picks data, leaves out critical facts and mischaracterizes some of the numbers, creating a highly misleading impression.”
The article by Guy Boulton and Dave Umhoefer notes that they will look later at the fiscal claims in Walker’s column, such as the assertion that during the period 2014 through 2019: “after all federal aid and tax credits are applied, the state’s portion of the bill [for implementing the ACA] will be $433 million.”
I evaluated some of the problems with the Governor’s column two weeks ago and later in a guest blog post for the Center for Children and Families at Georgetown University. However, it took me a little longer to track down the source of the $433 million figure, which I finally found in the January 2011 testimony of DHS Secretary Dennis Smith to Congressman Ryan’s committee. I hadn’t guessed that the op-ed would use such an early and incomplete calculation of the costs and benefits of ACA implementation, and then neglect to acknowledge the portion of Smith’s testimony that obliquely says the $433 million estimate doesn’t account for enhanced federal aid that might approach $1 billion (from 2014 through 2019) if Wisconsin closes the current gap in BadgerCare coverage.
There are a few problems with the total cost claimed in the Governor’s op-ed, but I’ll focus on the most blatantly wrong portion of his statement – the assertion that the amount cited accounts for all federal aid. In fact, the $433 million figure makes the odd assumption that the federal match rate for BadgerCare coverage of adults without dependent children would continue at its current level (60%), which clearly won’t be the case. Read more
Comprehensive Analysis of Costs and Benefits Calculates a $372 Million Gain
The Medicaid expansion authorized by the federal health care reform law is a great deal for the states. That conclusion was recently reinforced by a fiscal analysis by the state of Arkansas, which found that using the Affordable Care Act to close the gap in adult coverage in that state would yield the state treasury an estimated net gain of $372 million over the first six years of implementation.
The Arkansas analysis takes into account that there would be added Medicaid costs to the state because of enrollment growth among already-eligible adults and children, as well as newly-eligible adults. Notwithstanding the costs for those who are already eligible (which I think should be analyzed separately), their fiscal estimate concluded that the net budget impact would be positive because of the following factors:
- 100% federal funding for the newly-eligible adults during the period 2014-2016 (followed by a phase down to 90% federal funding).