Today’s Circuit Court Ruling Reinforces the Inconsistencies in State Lawmakers’ Reasoning
Should state lawmakers turn down federal funds whenever there’s a risk that the funding in question could be cut in future years? If so, why is Wisconsin proceeding with major highway and bridge construction plans at a time when Congress is using short-term gimmicks to keep the Highway Trust Fund from becoming insolvent? And why did Wisconsin cut BadgerCare eligibility in half for parents, based on reliance on federal funding to subsidize the federal health insurance Marketplace?
That last question has gotten little attention over the past year, but it will be raised more often following a ruling today by a subset of the DC Circuit Court of Appeals. Two of the three judges participating in that ruling concluded that federal subsidies for the health insurance Marketplace can only go to people in states that set up their own Marketplaces. Read more
At least 13 Wisconsin counties may include an advisory referendum on the November ballot asking voters whether Wisconsin should expand BadgerCare and take the federal funding that would cover the full cost of newly eligible childless adults. The proposed ballot measure, which has already been approved in 4 counties and enjoys broad support, has generated debate about whether the Medicaid expansion topic is an appropriate matter for an advisory referendum.
There are many strong arguments in favor of taking the federal funding (see WCCF’s “Top Ten” list); however, some people who argue against including the BadgerCare question on the November ballot contend that it’s not a concern of county government. But even if we assume for the moment that an interest in county residents’ access to affordable health care isn’t reason enough for counties to allow voters to weigh in on the issue, counties also have their own reasons to be very interested in whether the state expands BadgerCare and accepts the federal funds:
- One very important consideration for counties is they bear the financial responsibility (rather than the state) for some community-based Medicaid services.
Revenue Collections Continue to Fall, While Medicaid Deficit Takes Large Jump
The state’s fiscal situation has gradually deteriorated in 2014, and new tax collection figures released late Friday afternoon show a continuation of that trend. That fiscal problem is exacerbated by a couple of areas where spending is growing, including a substantial increase announced today in the estimated Medicaid deficit.
Starting on the revenue side of the state’s budget ledger, here are some of the key figures gleaned from the Department of Revenue’s press release:
- General Fund tax collections fell $26 million in May, compared to May 2013, which is a drop of 2.5% (measured on an adjusted basis).
- Over the first 11 months of the current fiscal year, state tax revenue is down by almost $49 million or 0.4%.
- Although sales tax revenue is up by $186 million or 5.2% over the last 11 months, individual income tax collections are down by almost $290 million – a drop of 4.6%.
National data released last week show that there has been a sharp increase in Medicaid enrollment since last September, and that trend continued in April. One surprising aspect of the latest HHS data is that the growth in Wisconsin trails that in most other states, even among the states that haven’t expanded Medicaid eligibility.
Nationally, 6 million more people were enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) in April, compared to the 3-month period before open enrollment under the Affordable Care Act began last October. That includes growth of 1.1 million additional people in April, as compared to March (in the 48 states that reported data for both months).
The following graph illustrates that the increases have been much higher in the 25 states that have accepted federal funds to expand Medicaid eligibility for adults to 133% of the federal poverty level. The average increase of 10.3% for all 50 states compares with a jump of 15.3% in the expansion states in April (relative to the average enrollment in those states from July through Sept. Read more
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?
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
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