The Joint Finance Committee met today to consider the Department of Health Services plan to cut the state’s Medicaid spending by making changes to BadgerCare that will result in tens of thousands of Wisconsin families becoming uninsured. The DHS plan was approved on a party-line vote of 11 to 4, with one of the Republican committee members absent.

A Journal Sentinel article does a nice job of summing up the debate and the effects of the committee’s action. (But I’m biased because I was quoted in the article; so check it out for yourself.)  The proposals approved by the committee today will now be forwarded to federal officials, who must review proposed Medicaid plan amendments and waivers of provisions that conflict with federal law.

One of the arguments DHS has been making is that the proposed BadgerCare changes requiring federal waivers of “maintenance of effort” (MOE) requirements (which restrict the power of states to reduce eligibility) are preferable to the fallback plan in the budget repair bill. That plan, which can be implemented without a federal waiver, would cut off BadgerCare for 53,000 adults with income over 133% of the poverty level. However, more than 8 months after the budget repair bill passed we finally learned that the proposals requiring waivers are expected to lower BadgerCare enrollment even more. According to the Department’s own estimates, which we think are conservative, the changes to BadgerCare approved today will reduce enrollment by nearly 65,000 people, including more than 29,000 children!  Our memo to the committee urging them to reject the plan explains why we think the projected savings ($90 million in state funding from the Maintenance of Effort changes alone) will result in cost shifting, rather than true cost savings. Some of the other points made in that memo include the following:

A huge increase in uninsured children – If, as we believe, two-thirds or more of the 29,000 children who lose BadgerCare coverage become uninsured, that would increase the number of uninsured children in our state by almost 30 percent, moving Wisconsin from having one of the lowest percentages of uninsured kids to a state that is average or even falls a bit short of the national median.

Loss of federal bonus funds – The large drop in enrollment of children in BadgerCare will significantly reduce the performance bonus funding Wisconsin receives for the substantial growth in the number of Medicaid-funded children participating in BadgerCare. Wisconsin received $23 million in performance bonus funds last December. To the best of our knowledge, the reduction in that funding hasn’t been factored into the DHS fiscal analysis of the proposed changes.

Unreasonable cost-sharing requirements – Parents making $10 per hour and living paycheck to paycheck shouldn’t be expected to pay as large a share of their income for health care costs as middle income families. Yet Attachment 5 at the end of the Fiscal Bureau analysis shows that the increased premiums, co-pays and deductibles would add up to a total in the range of 10% – 12% of income for low-income families in BadgerCare who are at or above 150 percent of the federal poverty level. (DHS has subsequently released information indicating a slightly lower amount of cost-sharing, which will still be out of reach for many low income families.) 

More than 350,000 people adversely affected – Our review of the Legislative Fiscal Bureau analysis indicates that more than 350,000 people in BadgerCare will be adversely affected because of the proposed changes, including 263,000 who will be moved into a new “alternative benchmark plan” that covers fewer services and requires much higher co-pays and deductibles.

Inadequate time for public input – The two public hearings held by DHS were hamstrung by the lack of sufficient information about their proposals and the real effects. It’s extremely disappointing that the sort of information that the public needed for meaningful comment on the proposals wasn’t available until Tuesday – via the Fiscal Bureau analysis. Before today’s vote, there should have been additional public hearings to help affected parties understand the changes and respond based on solid information about the proposals and the tradeoffs.  However, as we reported yesterday, Democrats plan several public forums over the next week or two to discuss the DHS plans and take public testimony.

You can watch a video of today’s JFC meeting on Wisconsin Eye.

Jon Peacock