By Forsaking Federal Funds, State Must Halt Effort to Develop “Real Time” Eligibility System

It was widely publicized last week that Governor Walker decided to put a halt to the state’s implementation of health care reform, including health insurance exchanges, and to stop drawing down federal funds from the $37.6 million Early Innovator grant that Wisconsin had been awarded early last year. In addition, the Governor repealed the executive order that established the Office of Free Market Health Care, and he shut down that office’s website.

What was not generally recognized last week is that the Governor’s actions will have effects that go well beyond putting a halt to health care reform implementation.  DHS will also be returning a federal grant of nearly $11 million that – as Jason Stein reported on Saturday – “could have helped make cost-saving improvements to existing health programs for the poor.” The Journal Sentinel article added: 
“Supporters of the federal health law say the Walker administration let ideology and distaste for the federal law trump common sense by turning down millions of dollars that could have saved the state money in areas beyond the health care law. ‘It’s really shortsighted and it’s really going to hurt the state,’ Rep. Jon Richards (D-Milwaukee) said.”

The $11 million federal grant was being used to improve the state’s Medicaid enrollment system. Because the Governor has decided to forgo using any more of that funding, DHS is putting a halt to computer system changes that would have enabled the department to make some of the BadgerCare changes that are part of the cost-savings proposals submitted to federal officials in November.  Specifically, DHS is pulling the plug on its efforts to develop a “real time” eligibility system. As I understand it, the indirect effects of that decision include not proceeding with the elimination of presumptive eligibility and retroactive eligibility.

Although I liked the idea of developing a “real time” process for determining eligibility, I was skeptical about whether or when it could be efficient enough to truly justify the elimination of presumptive and retroactive eligibility. Thus, I have mixed feelings about the indirect effects of the Governor’s decisions to cut off the funds for Medicaid system upgrades. On balance, however, I think it’s an unfortunate choice.  As I noted in the Journal Sentinel article, “We’re squandering an opportunity to make upgrades to our computers that badly need upgrades – with or without health care reform.”

Jon Peacock