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.
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
There are a lot of ways in which America’s free market health care system boosts cost to levels far in excess of the costs anywhere else in the world, even though Americans aren’t healthier, and don’t appear to be getting the best health care. Most of those ways are perfectly legal; others not so much.
Once in a while a health care corporation that is exploiting the opportunities to maximize profit in unethical or illegal ways is called on the carpet and forced to pay restitution for their shady exploits. There have been two examples of that in the last week or so, and both could help Wisconsin fill a hole in the state’s Medicaid budget.
Last week the U.S. Department of Justice announced that Johnson and Johnson will pay $2.2 billion to settle a lawsuit related to deceptive marketing and distribution of two antipsychotic drugs, Risperdal and Invega. The drug company misrepresented what the drugs should be allowed for, and allegedly paid kickbacks to doctors and agencies to make sure their drugs were prescribed for certain off-brand purposes. Read more