Expanding BadgerCare coverage to all adults below 138% of the federal poverty level (FPL) would save significantly more money for state taxpayers than previously estimated. According to a memo prepared last week by the Legislative Fiscal Bureau (LFB), expanding BadgerCare but would save state taxpayers an estimated $206 million during the 2013-15 biennium, compared to current law, but would cover 87,000 more adults than the state now expects to insure via BadgerCare at the end of the current fiscal year. That savings is $87 million more than the LFB calculated when the budget bill was being debated.
To put this news a little differently, by rejecting federal funding that would finance the full cost of providing BadgerCare to all newly eligible adults up to 138% of FPL, state lawmakers cost Wisconsin taxpayers $206 million in the current biennium and far more than that in the next biennial budget. One of the things making this news particularly significant is that the Department of Health Services estimated in late June that the state is facing a $93 million GPR deficit in the Medicaid budget. Read more
Advocates Seek DHS Help in Understanding the Decline
There have been a couple of big surprises in the recent data relating to BadgerCare. One is the much greater-than-anticipated increase in the enrollment of adults without dependent children. (Read more here.) The other is that the number of kids covered by BadgerCare has been decreasing, at a time when the budget bill assumed there would be a large increase.
A new WCCF fact sheet shows the BadgerCare enrollment trends since last September (and since the beginning of 2014), which are broken out for different categories of coverage and income levels. Here are two of the key findings relating to coverage of children:
- The number of children over the poverty level who are enrolled in BadgerCare and Transitional Medicaid (TMA) has dropped by more than 22,000 (12.5%) since September of last year.
- That decline has been partially offset by an increase of almost 13,500 children below the poverty level, yielding a net loss of more than 8,600 kids in BadgerCare and Transitional Medicaid.
Governor Walker has given state agencies guidance on how to develop their proposals for Wisconsin’s next budget, giving some glimpses into what the state’s 2015-17 budget might bring.
Wisconsin has a two-year budget. The budget process starts in the summer of even numbered years – like now — when the Governor instructs agencies in how to develop budget requests. Agencies submit their requests to the executive branch by September 15, and the Governor takes the requests into consideration when developing his own budget proposal to submit to the Legislature. The Governor is expected to release his budget proposal in the early part of 2015. For more about the Wisconsin state budget cycle, check the Wisconsin Budget Project’s Budget Toolkit.
For the upcoming budget, Governor Walker recently instructed agencies to assume there will be zero growth in General Purpose Revenue (GPR) appropriations in each fiscal year. In other words, he wants agencies to submit budget requests that are not any higher their budgets were two years ago, even though inflation and other factors have pushed costs up. Read more
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.
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?
Tax Plan Increases Red Ink in Next Budget and Leaves Holes in This One
Governor Walker conceded to reporters that his new tax cut proposals will increase the red ink in the 2015-17 state budget by about $100 million – meaning that lawmakers will have to grapple with a structural deficit of more than $800 million as the state goes into the next budget cycle.
According to initial statements to the press corps, his proposal includes a $406 million reduction to property taxes, a $98 million cut in personal income taxes, and the use of nearly $323 million to adjust income withholding schedules (which costs the state up front, but reduces the subsequent refunds the state owes to income tax filers). Another $100 million or so will be put into the state’s rainy day fund.
The deeper structural deficit is likely to be the most contentious aspect of Walker’s plan among Senate Republicans, but it is just one of many reasons why I think his proposal is extremely disappointing. Read more
A big jump in state revenue that will be announced soon gives lawmakers an excellent opportunity to invest in Wisconsin’s economic future and to put the state on a sounder fiscal footing by filling budget holes.