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.
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
Minnesota released much more complete information than Wisconsin did about premiums charged for insurance policies offered in the new insurance marketplace.
Committee Adds $30 Million GPR to Assist Hospitals with Higher Uncompensated Care Costs
This afternoon the Joint Finance Committee (JFC) approved the Governor’s plan to expand BadgerCare to cover about 80,000 additional childless adults who are below the poverty level, which is financed primarily by making almost 90,000 parents over the poverty level ineligible for BadgerCare. However, the Governor underfunded the plan, and the omnibus motion approved today by JFC (by a party-line vote of 12-4) adds $106 million GPR to the bill.
Part of the increased spending is because of the one significant change the committee made to the Governor’s proposal. They added $30 million GPR and $43.6 million of federal matching funds to help hospitals with the higher cost of uncompensated care that is expected after the state cuts in half the current income eligibility ceiling for parents.
With the added funding for hospitals (which is just for the 2013-15 biennium), the Governor’s plan is now expected to cost state taxpayers about $490 million GPR more during the period 2014 through fiscal year 2021, compared to the BadgerCare compromise offered by Democrats on the committee. Read more
Conservative members of the Joint Finance Committee (JFC) who support the Governor’s BadgerCare changes are in a tough spot. On the one hand, they don’t want to add funding to the budget, and would like to free up as much funding as possible for income tax cuts. On the other hand, they don’t want to take the enhanced Medicaid financing from the Affordable Care Act (even though it would allow the state to do a much better job of closing the large gap in BadgerCare coverage and reducing uncompensated care for hospitals). A new Legislative Fiscal Bureau (LFB) paper makes it clear that those two objectives are at odds.
The LFB paper (#321) compares three basic alternatives relating to possible changes in BadgerCare: 1) the Governor’s plan, which caps eligibility of parents and childless adults at 100% of the federal poverty level (FPL) and has the effect of cutting in half the current eligibility limit for parents; 2) covering parents and childless adults to 133% of FPL; and 3) covering childless adults to 133% and retaining current eligibility of parents (up to 200% of FPL). Read more
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