A Supreme Court decision expected within the next week could price health insurance out of reach for millions of Americans, including most of the 183,000 Wisconsinites insured through the federal Marketplace; however, state officials could head off that outcome. In Wisconsin it’s particularly important for state lawmakers to remedy the problem because they made our state more reliant on federal subsidies for the Marketplace when they ended BadgerCare eligibility for about 60,000 adults and 3,000 children. Read more
Wisconsin has more at stake than most other states when the U.S. Supreme Court issues a ruling in King v. Burwell, which will determine whether people can continue to get federal tax credits for health care coverage purchased through the federal health insurance marketplace. Read more
By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds Read more
The Joint Finance Committee votes Thursday, May 21, on a wide range of Medicaid issues, including whether to expand BadgerCare and save upwards of $345 million that could help prevent deep cuts in higher education and other parts of the budget. The most frequent argument made by conservatives against capturing that federal assistance is that we shouldn’t accept federal funding that might not be secure. However, if you were carefully watching the Finance Committee’s budget votes last Thursday you would have gotten a very different perspective on the willingness of the majority party to accept federal funding. There were at least two times last Thursday when the JFC voted to amend the Governor’s budget in ways intended to capture or utilize more federal funding. In one case (motion #345) the committee unanimously approved new standards that will make it easier for the Department of Children and Families to close child support cases.
Increase in Childless Adult Enrollment Boosts Costs and Potential Savings
The number of childless adults participating in BadgerCare is now expected to be about 6,800 per year higher than the budget bill assumed, which means the cost of not accepting enhanced federal assistance for covering that population is also considerably higher. A paper issued by the Legislative Fiscal Bureau this afternoon contains the new enrollment assumptions for childless adults and other Medicaid groups. By using those figures to do some quick calculations, I estimate that the state would save at least $23 million more than the Fiscal Bureau calculated back in February, when it said that by expanding BadgerCare and accepting the increased federal funding Wisconsin would enjoy a net savings of $345 million during the 2015-17 biennium. (My calculation is based just on the increased childless adult caseload and assumes that other factors, such as the cost per individual, haven’t changed since February.) [May 21 update Read more : LFB figures released this afternoon show that the net increase in savings was a little smaller than I calculated, which suggests that other variables also came into play.
From a budget perspective, no other state has nearly as much to gain as Wisconsin from expanding Medicaid coverage for low-income adults. Among the 21 states that have yet to expand Medicaid to cover low-income adults up to 138% of the federal poverty level, all the rest would have to spend a little more state funding (before accounting for indirect benefits), whereas Wisconsin is the only state that would have a large savings.
Cost Growth Underscores the Value of Accepting Federal Funds for BadgerCare Expansion
The latest quarterly report Read more on the state Medicaid budget, issued this week by the Department of Health Services (DHS), reinforces our concerns about the choice of Wisconsin lawmakers to spend substantially more for BadgerCare and insure far fewer people than if the state expanded eligibility to cover additional low-income adults.The new report reveals a $24.8 million net increase in projected Medicaid and BadgerCare spending in the current fiscal year, relative to what DHS estimated just three months ago. Despite that increase in program costs, the department says the Medicaid budget remains in balance because they plan to more than double the amount of drug settlement funds allocated for the Medicaid budget. (That funding comes from payments by manufacturers to settle lawsuits alleging they improperly charged for medications used by Medicaid recipients.) The jump in Wisconsin’s Medicaid costs does not come as a big surprise – considering the rapid growth in BadgerCare enrollment of childless adults, which is now almost 60% above the level that DHS originally expected it to reach at the end of the current fiscal year.
Number of Childless Adults in BadgerCare Jumps by More than 7,000 in February Read more
The latest open enrollment period for the federal insurance Marketplace caused tens of thousands of Wisconsinites to apply for health insurance – sharply increasing the number of people signing up for subsidized plans and also causing a big jump in BadgerCare enrollment. Those trends are a major success story for the Affordable Care Act, but they pose a challenge for state lawmakers. The number of childless adults in BadgerCare has jumped by more than 10% since December, which significantly increases the program’s cost. However, that unanticipated surge in enrollment also substantially increases the amount the state could save if state lawmakers accept the federal funding that would pay almost all of the cost of covering childless adults.
BadgerCare Cuts Have Made Wisconsin More Reliant on the Federal Marketplace
The latest Supreme Court case relating to the federal health care reform law is particularly important for Wisconsin. Our state has a lot at stake because of the decision to rely on the Affordable Care Act (ACA) to make subsidized private health insurance available to tens of thousands of people formerly eligible for BadgerCare. In addition, as the Star Tribune reported Read more , Marketplace premiums are higher in Wisconsin than in most other states, which makes subsidies more important here. Oral arguments in the case, King vs. Burwell, were heard today. The case calls into question whether low and moderate income people using the Federal Exchange (Marketplace) to purchase health insurance are allowed to receive the subsidies that currently help them pay for that insurance coverage. The plaintiffs argue that there is language in the ACA that seems to say subsidies are available only to people living where Marketplaces are “established by the state.” If their argument is accepted by the Court, eligibility for the subsidies would end in Wisconsin and up to 36 other states (unless they move quickly to establish their own insurance Marketplaces).
New survey figures released by Gallup this week show that the number of uninsured adults dropped again in the last quarter of 2014 and is down sharply since 2013. Even as Paul Ryan and some other members of Congress argue that the Affordable Care Act is “beyond repair,” the Gallup survey data show the law has been quite successful in achieving a key objective. As the Gallup analysis concludes:
“The Affordable Care Act has accomplished one of its goals: increasing the percentage of Americans who have health insurance coverage.”
According to the new Gallup findings, the portion of Americans between 18 and 64 who are uninsured declined from 21.2% in the third quarter of 2013 to 15.5% in the fourth quarter of 2014. By my calculations, that amounts to a reduction of more than 10.8 million non-elderly adults who are uninsured – a drop of about 27%. Here are some of the other highlights of the new Gallup data:
- The uninsured rate for adults of all ages, which peaked at 18% in the third quarter of 2013 (as shown in the graph above), declined to 13.4% a year later and to just 12.9% in the last quarter of 2014.
While Hospitals Elsewhere Back Medicaid Expansion, Wisconsin Hospitals Offer a Fallback Plan
Hospitals in Wisconsin and many parts of the U.S. are asking state policymakers to take measures to reduce the amount of uncompensated care, although the recommended measures aren’t always quite the same. In our state, the Wisconsin Hospital Association (WHA) is asking state lawmakers to renew an expiring appropriation that provides state financial relief to hospitals that care for a disproportionate share of the uninsured or underinsured. The $30 million state appropriation, which expires in June, captures $44 million in federal funds for “disproportionate share hospitals” (DSH). Wisconsin Health News reported last week that WHA plans to ask state policymakers to renew the appropriation. Extending that funding makes sense if state lawmakers continue to refuse to expand BadgerCare to cover more low-income adults, but the expansion option could save the state close to $300 million Read more in the next budget and do far more to improve access to insurance and help hospitals.