Finance Committee Schedules Public Hearing and Vote on Monday
The bill to delay changes to BadgerCare and the state high-risk plan (HIRSP), which will be considered in the state Assembly next week, is estimated by the Legislative Fiscal Bureau to reduce the state-funded share of Medicaid spending by $23.1 million during the 2013-15 biennium. The estimated net spending reduction drops to $20.3 million GPR if one takes into account higher spending at the Department of Corrections for hospitalization costs, which the budget bill assumed would be shared by the federal government after the state covers more low-income childless adults.
(Note: Since the proposed legislation doesn’t close the $2.8 million hole in the DOC budget, the correct cost saving figure — at least for now — is $23.1 million.)
A copy of the bill was released by the Walker Administration today, and late this afternoon the Legislative Fiscal Bureau released their analysis. You can find both the bill and the LFB analysis here. The Governor’s proposal would delay until April 1, 2014, all of the BadgerCare eligibility changes (including the unsubsidized coverage for children in families over 300% of the poverty level, and the unsubsidized BadgerCare Basic coverage for a small number of childless adults).
In addition, the Joint Finance Committee announced today that it will hold a public hearing on the bill on Monday, Dec. 2, at 11 a.m. in room 411 East. The committee will take public testimony, which will be limited to two minutes per person. The committee is expected to vote on the bill after the hearing. The projected savings stem primarily from the fact that childless adults are considerably more expensive to cover than parents ($368 per person per month, versus $197 for parents), so the savings from delaying the initiation of coverage for childless adults surpasses the cost of the delay in cutting off adults over the poverty level. Also the fiscal analysis assumes that the delay in initiating the childless adult coverage will cause a longer term delay in the ramp-up of enrollment (resulting in $7.8 million in state GPR savings in the second year of the biennium).
The LFB analysis also estimates the cost of amending the bill to begin the expansion for childless adults in January, rather than delaying it until April. They estimate that passing the bill with that amendment would increase state Medicaid spending by $21.6 million (relative to the Act 20 level), but the net cost increase is $18.8 million when one takes into account the savings of almost $1 million per month that will be enjoyed by the Dept. of Corrections once eligibility is expanded.
The $18.8 million net cost increase would turn into a very large savings if the state decided to accept the enhanced federal Medicaid funding that would initially pick up the entire cost of covering childless adults up to 138% of the federal poverty level. The LFB paper doesn’t include an estimate of that savings (but they subsequently said it would save $86.4 million GPR during the current biennium).
The expense of the delay in terminating the HIRSP program is expected be covered in part by a $14 million surplus in that program at the end of the year.
A good Journal Sentinel article by Jason Stein contains some of the arguments for and against the proposal to take the enhanced federal funds and keep the Governor’s promise that Wisconsin would avoid creating a coverage gap for many of our neediest state residents.
Jon Peacock
