Surge in BadgerCare Enrollment Increases Potential Savings from Federal Funds

Wednesday, March 11, 2015 at 5:54 PM by

Number of Childless Adults in BadgerCare Jumps by More than 7,000 in February  

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.The new figures posted this week on the DHS website show that in late February BadgerCare was covering almost 156,000 childless adults whose income is below the poverty level. Total BadgerCare enrollment grew by more than 20,000 in the first two months of the year, including an increase of 14,619 childless adults. (Since December there has also been an increase of more than 4,000 kids in families below the poverty level, but that merely gets the number of kids in BadgerCare and Transitional Medicaid back to where it was in October of last year.) 

About a month ago the Legislative Fiscal Bureau issued a paper that estimated that expanding BadgerCare to 138% of the federal poverty level (from 100% now) would save $345 million over an 18-month period (from January 2016 through the end of the biennium) by qualifying our state for the enhanced federal Medicaid funding that Wisconsinites are helping pay for. However, the LFB paper was written before the January enrollment numbers were available and didn’t take into account the very large and unexpected rise in childless adult enrollment over the first two months of 2015. 

The LFB calculations assumed that the number of childless adults in BadgerCare would be about 152,000 at the end of the current fiscal year, and would inch up to an average of 153,000 in FY 2016 and 155,200 in FY 2017.  Based on the additional two months of enrollment data we now have, it’s pretty clear that the number of childless adults in BadgerCare in the next biennium will be far above the level that the Fiscal Bureau assumed in their last memo. 

Let’s assume for the sake of a hypothetical analysis that the growth in the number of childless adults will taper off over the next few months and their enrollment will average 161,000 in FY 2016 and 163,200 in FY 2017. Those assumptions, which are 8,000 above the participation level the LFB estimated, would have the following fiscal implications:

  • If Wisconsin continues to reject the federal funding, the state share of the cost for a higher enrollment level will be about $33 million greater than what is assumed in the state budget bill.
  • A BadgerCare expansion that took effect in January 2016 would save about $24 million more than the LFB previously estimated.
  • That would bring the total savings from qualifying for the federal funding to almost $370 million, plus up to $30 million of state savings if policymakers decided that expanding BadgerCare coverage reduced or eliminated the need to increase assistance for hospitals for the cost of uncompensated care.  

In short, the recent surge in enrollment of childless adults is likely to require deeper cuts in other parts of the budget, unless state lawmakers either: a) renege on their commitment to avoid a coverage gap for low-income adults below the poverty level, or b) decide to broaden BadgerCare eligibility and accept the federal funding that could save state taxpayers between $350 and $400 million in the next biennium. The second of those two options would be the far better choice for low-wage workers in Wisconsin who earn too much to be below the poverty level, and also the far better option for Wisconsin taxpayers. 

Jon Peacock

 

One Response to “Surge in BadgerCare Enrollment Increases Potential Savings from Federal Funds”

  1. Jerry says:

    Will Governor Stubborn ever acknowledge the error of his ways and accept the federal funding for the good of all of us. I suspect not as he is no longer serving as governor of Wisconsin rather he is serving his political ambition for higher office. Isn’t it shameful upon starting his 2nd term he abandons the people he promised to serve and reverses his position on numerous issues and submits a budget that cuts needed public services because of giving away election year tax cuts with no revenue coming in to pay for them. Once again he will deny the citizens of this state the government they deserve because he can only see the next election not the next generation.