$190 Million Annual Savings + Threats to Federal Marketplace = Stronger Case for Expansion
There are many reasons why it makes sense for Wisconsin to modestly increase the eligibility ceiling for BadgerCare. A new memo by the Legislative Fiscal Bureau (LFB) sheds light on and strengthens one of those reasons – the large savings for Wisconsin from increasing the BadgerCare eligibility standard for adults.
Ironically, the ongoing efforts to repeal or undermine the Affordable Care Act (ACA) may also bolster the case for expanding BadgerCare, since the individual insurance Marketplace created by the ACA was Governor Walker’s rationale for sharply reducing BadgerCare eligibility. But let’s come back to that point after taking a closer look at the fiscal effect of expansion.
Under the Affordable Care Act, states that expand eligibility of adults to 138% of the federal poverty level are eligible for substantially higher federal cost sharing. Taking that step would qualify Wisconsin for reimbursement of at least 90% federal funding for the costs of covering childless adults, compared to the 58% reimbursement rate in effect now. Read more
Federal policy guidelines that were adjusted for inflation last week are worth examining because they help illustrate the challenges faced by low-income working families. They show, for example, that single parents with one child are currently ineligible for BadgerCare if they have a full-time job that pays more than $7.81 per hour!
The federal poverty guidelines are updated early each year, and the 2017 guidelines that were issued on January 31 increase the Federal Poverty Level (FPL) by 1.3%. That raises eligibility for many federal benefit programs, such as Medicaid, food stamps and child care subsidies. An updated table on the Wisconsin Budget Project website shows what the poverty level is for different family sizes and how that affects eligibility for different public benefits. It also translates the annual poverty level figures into monthly and hourly incomes. Read more
New data from the Wisconsin Hospital Association show that the federal health care reform law has had the desired effect of causing a sharp drop in uncompensated care. That’s great news because much of the cost of uncompensated care for people who are uninsured gets shifted to other patients and contributes to higher rates for people with insurance.
The reduced spending for uncompensated care – which is the total of charity care and bad debt – also has the benefit of creating a great opportunity for hospitals to make upstream investments that promote public health and alleviate some of the factors causing severe health disparities.
The new data demonstrate that uncompensated care expenses borne by Wisconsin hospitals have dropped precipitously since 2013, as key parts of the Affordable Care Act (ACA) were being implemented – including the new insurance Marketplace and the expansion of coverage for childless adults. After those provisions had been in place for two years, total uncompensated care fell in Wisconsin by $534 million in fiscal year 2015, a drop of 36.8 percent from the 2013 level. Read more
Uninsured Rate Declines Sharply Nationally and in Wisconsin
New data released today by the U.S. Census Bureau show that the federal health care reform law has been extremely effective in reducing the number of people who are uninsured, both nationally and here in Wisconsin. The new figures also bring very good news on national improvements relating to income and poverty.
The number of Wisconsinites who do not have health insurance fell sharply during the first two years of implementation of the Affordable Care Act (ACA). According to the new data from the American Community Survey (ACS), 195,000 fewer Wisconsin residents were uninsured last year than in 2013, a decline of 37.6%.
The national ACS data show that the number of Americans without health insurance fell by more than a third from 2013 to 2015, and the percentage who are uninsured is now at an all-time low. That reflects a drop in the uninsured population of almost 7 million last year, on top of an improvement of about 8.5 million in 2014, when key parts of the health care reform law took effect. Read more
There’s a rapidly growing body of academic research documenting the benefits of using the Affordable Care Act to expand Medicaid eligibility of adults.
Academic researchers love experiments with control groups, and those kinds of tests of public policy changes can be hard to find. However, the 2013 Supreme Court decision that made Medicaid expansions optional for states has been a boon for researchers. They can now study the changes in 31 states that have extended eligibility for adults to 138% of the poverty level, and can compare those states with the 19 “non-expansion” states. (Wisconsin is in the latter group because it caps BadgerCare eligibility for adults at the poverty level.)
One such study was published this month in the Journal of the American Medical Association Internal Medicine (JAMA). It compares health outcomes for patients in Kentucky and Arkansas – two states that accepted the expansion of Medicaid – with outcomes for patients in Texas, which has rejected it. Read more
Reduced Participation Provides Opportunity and Reason to Streamline Enrollment Procedures
Members of the legislature’s Joint Finance Committee got some very good news last Friday in the form of a quarterly report on the state Medicaid budget from the Wisconsin Department of Health Services (DHS). The letter from the interim Secretary of DHS indicates that the agency now estimates that Medicaid spending during the 2015-17 biennium will be $418.6 million below the amount lawmakers anticipated when they passed the budget bill a year ago.
The portion of Medicaid spending specifically from state General Purpose Revenue (GPR) is projected to be almost $176 million (3.1%) less than the budget bill set aside. That’s an improvement of $90.6 million GPR since the last projection was made three months ago.
These numbers from DHS are very good news at a time when state revenue projections haven’t been very good. The reduced growth in Medicaid spending improves the prospects for keeping the total state budget in the black – without resorting to additional remedial measures (beyond the delay in debt payments that the Governor already implemented). Read more
If Ryan Plan Passes, Continuation of BadgerCare Changes Would Amount to a “Bait and Switch”
A health care plan introduced last week by Speaker Ryan would roll back many of the improvements in health care that have been achieved over the past several years. It would reverse much of the huge increase in the number of people with insurance, undermine improvements in access to preventive health care services, and raise costs for many people with insurance.
I could go on at length about problems with the plan, but I want to focus now on an important Wisconsin angle – how the Ryan plan would adversely affect many of the 60,000 low-income working parents that state lawmakers removed from BadgerCare two years ago. Many aspects of the Ryan plan would compound the difficulties those parents are already coping with because of the policy choices in Wisconsin, and would take away what they were promised when the state ended their BadgerCare coverage. Read more
National Health Policy Expert Critiques State’s Narrow Evaluation of BadgerCare Changes
Wisconsin received a federal waiver to make significant changes to BadgerCare in 2014, and one of the conditions of that “demonstration waiver” was that the state would evaluate the effects of the policy changes. A national health policy expert, Sara Rosenbaum, reviewed the planned evaluation and in a blog post last week wrote that the analysis designed by state officials fails to address several of the key aspects of the policy changes being implemented in our state. Read more
The Legislative Fiscal Bureau (LFB) has calculated that expanding BadgerCare and thereby qualifying for a higher federal reimbursement rate would yield huge savings for Wisconsin.
The most recent LFB analysis, issued last December, examined the effects of boosting the BadgerCare income limit for adults to 133 percent of the federal poverty level (FPL) from 100 percent of FPL now (which amounts to just $7.70 per hour for single parent with one child). The LFB concluded:
- Initiating that change in January 2016 would have saved state taxpayers $323.5 million during the 2015-17 biennial budget period, while covering an additional 83,000 adults.
- The state would have netted nearly $1 billion in savings over a six-year period!
- A one-year delay in the expansion would reduce the savings by $236 million, but Wisconsin would still save an average of more than $15 million per month once the change took effect.
Opponents of expansion haven’t directly challenged those estimates. Read more
A change in federal Medicaid policy announced in February creates an exciting opportunity to improve health care for Native Americans. It’s an opportunity that Wisconsin tribes and state officials should seize in order to help alleviate the extreme disparities in health between Native Americans and whites in Wisconsin.
The revised interpretation of Medicaid reimbursement policy expands the scope of health care services for Native Americans that are fully paid for by the federal government, without the usual requirement for state matching funds. In the past, the federal government paid 100% of the cost of Medicaid services provided directly by Indian Health Services (IHS), but not for health care provided outside of IHS facilities. Under the new policy, federal funding will also cover the full cost of Medicaid services delivered to American Indians by providers under contract with IHS, if IHS or a tribal practitioner refers the Medicaid patient and continues to oversee their care. Read more