Revised Waiver Makes One Improvement, but Contains Harmful Changes to Transitional Medicaid

On Friday, August 9, the Department of Health Services (DHS) submitted a request to the Obama Administration for a waiver to implement the changes to BadgerCare prescribed by the recently enacted budget bill. The DHS request, which is amended only slightly from the version they circulated for public comment, would allow the state to provide Medicaid coverage (via BadgerCare) to adults up to the federal poverty level (FPL) and would also make changes to Transitional Medical Assistance (TMA) for adults over the poverty level.

Those two parts of the waiver are separate and distinct. I suspect that the portion allowing the state to cover childless adults below the poverty level will be approved easily, but the negative changes to TMA are likely to be a much tougher sell. Although WCCF raised a number of concerns about that portion of the waiver in the comments we submitted, the long DHS summary of the public comments does not respond to our arguments.

DHS did, however, make one small but important change in the waiver proposal. The new waiver request says the department “will allow presumptive eligibility for childless adults to be determined and certified by qualified hospitals, in the same way that this will be done for parents and caretaker relatives with incomes not exceeding 100% FPL.”  That will help hospitals hold down uncompensated care by giving them an expedited way to sign up eligible adults who need treatment but are not yet enrolled in BadgerCare.Although we are pleased by that change, we are very disappointed that DHS continues to seek federal approval for changes to TMA that conflict with federal law and should not be waived.  TMA is a category of Medicaid that grew out of welfare reform and extends Medicaid eligibility by 12 months for parents who are lifted above the poverty level by a new job or a raise. Since July 2012, DHS has been applying premiums to adults in TMA who have income above 133% of FPL, but the federal approval for that is intended to expire in 2014.

The proposed changes to TMA coverage would do the following:

• Extend the federal authorization to charge premiums to parents above 133% of FPL, so that authority doesn’t expire next year.
• Expand that authority to also apply premiums to parents between 100% and 133% of FPL. (In May there were about 14,000 parents in TMA in that income range.)
• Preclude any adults who miss paying a premium from participating in BadgerCare for the next year (unless their income drops below the poverty level).

We believe that the changes to TMA are inconsistent with the Affordable Care Act and are not a justifiable change or test for a demonstration waiver. The state has already been running a test on the effects of premiums on a slightly higher income group of parents, and we think those results justify pulling the plug on that experiment, rather than extending premiums to an even poorer set of families.

The preliminary DHS study of the effects of the increased and expanded premiums the state initiated in July 2012 show a devastating effect for low-income adults, especially those between 133% and 150% of FPL. Among the 18,544 parents and caretakers on BadgerCare in July 2012 who were in that income range, only 31% were still on BadgerCare in December. Failure to pay a premium caused 21% of the original 18,544 to lose their coverage within six months; but among those who weren’t disqualified for some other reason during the initial six months, 41% lost their coverage for failing to pay a premium!

Transitional Medical Assistance is supposed to help families that are just moving into the work force by giving them a transition period before they have to begin paying premiums.  Enough damage to their access to affordable health care coverage has already been done by applying premiums to those above 133% of the poverty level.  Let’s learn form the data that DHS has already collected and not expand this experiment.  

Jon Peacock