A federal official at the Centers for Medicare and Medicaid Services (CMS) announced today that the agency probably won’t be able to act as quickly as the Walker Administration had hoped on a long and complicated waiver request that would allow the state to make sweeping changes to BadgerCare. However, the letter from CMS to Secretary Dennis Smith of the Wisconsin Department of Health Services (DHS) clears the way for the state to begin implementing some portions of its proposals.The federal health care reform bill requires states to maintain current levels of coverage for children and for adults with income below 133 percent of the federal poverty level (FPL). On November 10, 2011, DHS submitted a 221-page request to CMS for a waiver of the federal law requiring states to maintain current standards relating to eligibility and enrollment.

The Legislature and Governor have pressured federal officials to speed up the usual deliberative process for review of waiver requests. They included language in the budget and budget repair bills directing DHS to eliminate eligibility of parents and childless adults with income over 133 percent of the poverty level if the state doesn’t get a federal waiver by December 31 of this year. However, the goal of trying to get CMS to act on the waiver proposal by the end of the year was undermined by not submitting the request to federal officials until November 10, approximately eight months after the legislature passed the bill directing DHS to seek a waiver.

The letter sent to DHS today by Cindy Mann, director of the federal Center for Medicaid and Children’s Health Insurance Program Services, describes the numerous parts of the review process that will require ongoing analysis of the proposals and continued discussions with DHS, and it concludes:

“For these reasons, while we will continue to work diligently with you and your staff as we move forward in our review of Wisconsin’s proposals, we want to advise you that it is unlikely we will be able to meet the State’s requested approval date of December 31, 2011, for all of these proposed sweeping changes to its programs.”

The CMS letter does make a significant concession to the state by giving DHS a green light to apply several of its proposed policy changes to adults with income over 133 percent of the poverty level. CMS concurred with the state’s argument that federal law does not require DHS to get a waiver before making changes restricting or eliminating BadgerCare eligibility for those 53,000 adults. In addition, CMS determined that the state does not need a waiver to proceed with its proposal to speed up terminations of eligibility for people who no longer meet existing eligibility standards.

Ken Taylor, executive director of the Wisconsin Council for Children and Families, applauded the decision by CMS not to rush the agency’s consideration of all of the various portions of the state’s waiver request:

“The changes in the waiver request would harm at least 168,000 Wisconsinites. A decision this big shouldn’t be rushed through just to meet the state’s arbitrary December 31 deadline. Granting the waiver would also send the message to other states that they can drop millions of people from Medicaid. The Affordable Care Act was designed to protect people from that, and we shouldn’t encourage states to undermine this important piece of health care reform. ”

A bill introduced in the Assembly, AB 339, would return to the Legislature the authority to set Medicaid and BadgerCare policy and would eliminate the requirement that the state end eligibility of certain adults, beginning on July 1, 2012, if a waiver hasn’t been approved by December 31. AB 339 would give the state more time to work with federal officials on potential compromise plans, rather than limiting the options to just two choices: approval of the waiver request or elimination of BadgerCare coverage for 53,000 adults.

A recent WCCF publication provides a side-by-side comparison of the consequences of those two options.  In addition, we commented on the letter in a press release today. 

Jon Peacock