LFB Finds the ACA Medicaid Option Would Cover Far More People at a Substantially Lower Cost

Thursday, February 14, 2013 at 5:28 PM by

New Fiscal Bureau Memo Examines Alternatives for Changing BadgerCare Eligibility

A Legislative Fiscal Bureau (LFB) memo that was released today provides a preliminary analysis of the costs and benefits of the sorts of changes to BadgerCare proposed by Governor Walker yesterday, compared to the effects of using the Medicaid funding provided by the Affordable Care Act (ACA) to improve access to coverage for adults who don’t have dependent children.  The memo indicates that Wisconsin can cover a lot more people at a much lower cost to the state by using the ACA 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.

As I explained in a WCCF blog post yesterday,  the Governor said he won’t recommend using the federal money that could finance all of the cost of the expanded coverage of childless adults in the next biennium. Instead, the Governor’s plan will finance the cost of covering about 82,000 additional childless adults by ending BadgerCare coverage for about 87,000 parents (according to DHS estimates).

The Fiscal Bureau analysis uses a couple of different scenarios regarding the number of childless adults below 133% of FPL who would enroll in BadgerCare if the state used the enhanced federal funding provided by the ACA option.  For purposes of this overview of their findings, I’m using their higher enrollment and higher cost scenario, which assumes that 175,000 childless adults would be enrolled (an increase of 155,000 over the current Core Plan enrollment).   Here are a few key points synthesized from the LFB memo:

  • By using the enhanced federal financing, BadgerCare would cover about 164,000 more people than capping eligibility of childless adults and parents at 100% of FPL, as proposed by the Governor, yet would cost the state about $254 million less from 2014 through fiscal year 2020 (an average of $39 million GPR less per year, over 6.5 years).  
  • In the 2013-15 biennium, using the ACA option would cost the state about $58 million GPR less than the Governor’s proposal.
  • Even in fiscal year 2020, when the federal share of costs for childless adults has declined to 90%, the broader coverage of the ACA option would cost $20 million less than capping eligibility at 100% of FPL.
  • A scenario that captures the federal funding and sets the eligibility limit at 133% of FPL for both childless adults and parents would save the state $484 million GPR through FY 2020, compared to setting the cap at 100%, but would cover about 126,000 more people in BadgerCare than the Governor’s plan.

Keep in mind that the LFB analysis is very preliminary.  I believe it was prepared before the Governor’s plan had been released, and some of the details of that plan are still unclear.  The LFB also uses slightly different enrollment assumptions – estimating that capping eligibility at 100% of FPL would cause a net drop in BadgerCare participation of about 9,000 people, while DHS estimates a net decline of about 5,000.   In addition, DHS might be planning some changes to reduce costs that they haven’t unveiled yet.  More importantly, the LFB memo doesn’t take into account the effect of an influx of already-eligible adults from the ACA.  Nevertheless, the LFB memo provides a very useful initial comparison of the various options.

We applaud the Governor for his interest in reducing the number of uninsured Wisconsinites.  Now we hope the state can have a clear-headed discussion of the most cost-effective way to improve access to health insurance and reduce the uncompensated care costs that are shifted to people who have insurance.  

Jon Peacock

Categories: 2013-15 biennial budget, BadgerCare Plus, Blog, HEALTH & HUMAN SERVICES, health care reform, Medicaid | Comments Off on LFB Finds the ACA Medicaid Option Would Cover Far More People at a Substantially Lower Cost

Comments are closed.