The Walker Administration’s changes to BadgerCare take effect today (July 1). Fortunately, because of the “maintenance of effort” requirement in the Affordable Care Act, the changes are much more limited than what the Department of Health Services (DHS) initially proposed. (See our comparative summary of the initial proposal and the final version.)

The following changes, which are now in effect, are all limited to non-pregnant, non-disabled adults with income above 133 percent of the federal poverty level (FPL):

• Requiring premiums to be paid by all parents (and caretaker relatives) over 133% of FPL, rather than just those above 150%, and increasing premiums for those over 150% of FPL.
• Applying premiums to childless adults over 133% (who previously did not owe premiums for the narrower benefits available for adults without minor children). 
• Dropping adults for a year, rather than six months, if they fail to make a premium payment. 
• Ending BadgerCare coverage of parents and caretaker relatives if (when they come up for their annual renewal) they have access to employer-sponsored insurance and their portion of the premium for employee-only coverage would cost not more than 9.5% of family income (regardless of how high the deductibles and co-pays are for that coverage). 
• Ending eligibility of the spouse of an employee who has an offer of employer coverage that meets the condition noted above (if that plan could also cover the spouse), even if inclusion of the spouse would raise the premium above the 9.5% standard. 
• Ending retroactive eligibility for parents and caretaker relatives in families with income above 133% of the poverty level. 

Our Q and A summary of those cost-cutting measures explains them in more detail and provides an example of the effects of most of the policy changes noted above.  You can also read more about the changes in DHS Operations Memo #12-25.

We need to make one small correction in our summary documents. After the changes were approved by federal officials in early May, it appeared that they would reduce state GPR spending by about $28 million per year. A June 29 DHS letter to the Joint Finance Committee puts the cost-savings at $25.4 million.  That means that virtually all of the changes could have been avoided if DHS had used for BadgerCare the $24.5 million federal Performance Bonus Wisconsin received in December 2011 because of BadgerCare’s success, rather than lapsing those funds to the state treasury.  

If you, or someone you know, is feeling the impact of these changes, we would like to hear from you. Please link here to share your story.

Jon Peacock