The Governor’s budget proposes partially closing the current gap in BadgerCare by extending eligibility to all adults below the poverty level who don’t have children, and we commend the Governor for that.  However, the Governor’s budget stops short of the step states need to take (covering adults to 133% of FPL) to qualify for full federal funding of the cost of covering the newly-eligible adults.

To devise a cost-neutral way of covering low-income childless adults, the Governor proposes eliminating BadgerCare coverage for adults over the poverty level, beginning in 2014.  As we explain in a new overview of health care issues in the budget bill, the proposal to cut in half the current income eligibility ceiling will end BadgerCare coverage for about 95,000 adults (89,000 parents and 6,000 childless adults). The Walker Administration justifies the reduction in BadgerCare eligibility on the basis that adults over the poverty level can get federal subsidies (premium tax credits) for coverage through the new health care exchange that is slated to begin in January 2014.

An article by Jason Stein in Sunday’s Journal Sentinel examines one of the risks inherent in that strategy – the possibility that exchanges won’t be functioning smoothly in Wisconsin by the beginning of 2014. As I state in that article, I think federal officials will get some sort of exchange in place by next January, but I’m not optimistic that it will get off to a quick start and will be a good substitute for BadgerCare. Even as the Walker Administration embraces exchange coverage as a rationale for cutting BadgerCare, it appears that state officials continue to resist playing any role in helping to ensure that the exchange is designed in a way that best serves Wisconsin’s unique marketplace, and that it creates a seamless interface with BadgerCare.

Potential delays or glitches in the development of a smoothly running exchange are just one part of the many reasons why cutting the BadgerCare income limit in half for parents next year is an extremely risky strategy, particularly in a state that has yet to make an effort to help make the exchange a success. It is because of the array of those risks that the Wisconsin Hospital Association is making the very sensible suggestion that the state should delay rolling back BadgerCare coverage for a couple of years until exchanges are operating effectively.

Jon Peacock