What Does Walker’s New Opposition to Health Care Exchanges Mean for the State’s Federal Grant?

Tuesday, January 17, 2012 at 10:49 PM by

Will the Governor Give up the Grant, Will Federal Officials End It, or Neither of the Above?

Politico posted a very interesting article on its website last night – “Scott Walker’s health care dilemma” – relating to the question of whether Governor Walker will decide to terminate the Early Innovator grant Wisconsin received a year ago to cover costs associated with health care reform implementation.  In recent weeks the Governor has been pressured to “return” the grant, after he said just before Christmas that the state would stop implementing the health care reform law.

As the article notes, Walker “is the lone Republican governor keeping an Early Innovator grant awarded early last year under the health reform law. ….He isn’t using the $37 million federal grant. He isn’t giving it up. And it may stay that way.”  However, the Governor is under pressure from Senator Lasee and Tea Party activists to reject the federal funding.  In addition, some Democrats are questioning how Walker can allow the grant funding to continue, and whether federal officials have to cut it off.

The Politico article addresses a couple of misconceptions. First, it counters the erroneous perception of many people that the state has already received the federal money:

“Actually, even though the state was awarded $37 million, the government didn’t send out a big check, so ‘giving back’ the money is a bit of a misnomer. An Early Innovator has to meet benchmarks in order to tap into each portion of the funds. Wisconsin did meet some early requirements and got some money to work on the technical aspects of creating the exchange framework. (Neither the state nor CMS – the Medicare and Medicaid agency overseeing the Early Innovators — has said how much, although public documents show it was just $1.3 million in September.)”

The article also points out that Obama Administration officials aren’t likely to cut off the funding anytime soon:

“In fact, even though Wisconsin walked away from ‘early innovation,’ CMS still sees the state as an innovation success story in some respects. …It had completed a working prototype of an exchange portal and made significant progress on its real-time Medicaid eligibility systems — one of the most complex aspects of exchange design. According to a September report, Wisconsin had spent roughly $1.3 million of the grant and hit numerous baselines, giving the state the opportunity to draw down more funds if and when it chooses to do so.”

The political pressure on the Governor to forsake the federal funding makes this an intriguing story to follow. Unfortunately, that controversy might distract from the more basic question of whether it would make more sense at least to be making contingency plans, in the event that the Supreme Court upholds the constitutionality of some or all of the Affordable Care Act.  As I noted in the initial Journal Sentinel article about the Governor’s change of heart, putting a halt to further state work will leave the state ill-prepared if the federal law isn’t fully overturned. 

For more on the topic of whether Wisconsin should keep planning for health care reform implementation, see the January 9th Journal Sentinel editorial. See also the letter to the editor by my co-worker, Sara Eskrich.

Jon Peacock

Categories: Blog, health care reform | Comments Off on What Does Walker’s New Opposition to Health Care Exchanges Mean for the State’s Federal Grant?

Comments are closed.