New Paper Examines Options for Closing the Medicaid Deficit

Friday, April 20, 2012 at 6:32 PM by

According to a new analysis released today by the Wisconsin Budget Project, the recent contraction of the state’s Medicaid deficit allows the remaining shortfall to be eliminated without damaging cuts to BadgerCare, which could adversely affect more than 300,000 Wisconsinites, and the new report summarizes several options for accomplishing that.

The paper explains that the projected size of the 2011-13 Medicaid deficit declined from $220 million GPR last fall to $82 million in early April. That figure doesn’t take into account various administrative actions DHS has been taking to reduce Medicaid spending, which the department estimated would reduce state GPR spending for Medicaid by about $75 million. As a result, the most current available DHS figures indicate that the state is just $7 million short of balancing the Medicaid deficit.

The Budget Project analysis summarizes the status of changes to BadgerCare proposed by the Department of Health Services (DHS), which could cut the state share of spending for the program by as much as $50 million GPR, and would cause roughly 17,000 adults to lose their BadgerCare coverage, while significantly increasing the cost of coverage for over 300,000 participants.

The paper outlines three alternatives for eliminating the Medicaid deficit without adversely affecting many of the working families who rely on BadgerCare: 1) applying to Medicaid spending, rather than to the General Fund, the next federal performance bonus award for BadgerCare; 2) eliminating one of the new corporate tax breaks approved in the budget bill; or 3) implementing a much narrower change to BadgerCare. The paper concludes that any one of those options would close the anticipated shortfall and avoid the devastating impacts to working families.

Jon Peacock

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