The health care reform reconciliation (or “fix it”) bill that was signed by the President on Tuesday improves the bill financially for Wisconsin. Although the final product is much closer to the Senate’s version than the House bill, two changes that were championed by the House will give Wisconsin a larger and fairer share of federal financial support for the health care system.
Medicare payments for hospitals – Hospitals in Wisconsin and a number of other fairly rural states have long been getting significantly lower reimbursement rates for Medicare services than hospitals in many other states, despite producing some of the best health outcomes. Rep. Kind and other members of the Wisconsin delegation worked hard to see to it that the reconciliation bill will help reduce that inequity by making Medicare payments to providers more closely tied to quality outcomes. For example, beginning in 2013, a portion of a hospital’s Medicare payment will be linked to the hospital’s performance on quality measures related to common and high-cost conditions. The new law also directs the Institute for Medicine and the National Academy of Sciences to conduct a study and develop recommendations to level the playing field for states like Wisconsin that have been getting the short end of the current payment system.
Funding for coverage of childless adults – A very important part of the bill is the requirement that states provide Medicaid coverage to all citizens with incomes below 133 percent of the federal poverty level, beginning in 2014. To soften potential opposition from the vast majority of states that don’t currently cover many adults, the bill will initially pay the full cost of insuring newly eligible parents and childless adults, and will continue to pay about 90 percent of those costs on an ongoing basis. However, in Wisconsin and the 10 other states that are now covering childless adults, early versions of the bill would not have increased the federal share of spending on the already eligible adults.
The final compromise addresses that inequitable treatment and is a much better deal for Wisconsin, at least with respect to coverage of childless adults below 133 percent of the poverty level. Beginning in 2014, the federal share of spending for those already enrolled childless adults will jump to 80 percent in Wisconsin, from the current 60 percent, and it will gradually climb to 90 percent in 2020. For newly eligible childless adults, such as those on the BadgerCare Core Plan waiting list, the federal government will fund the full cost from 2014 through 2016, and then that share will gradually decline to 90 percent in 2020. From that year forward, the federal match rate will be 90 percent for all childless adults below 133 percent of poverty, and that will be consistent in all 50 states.
Shorter term assistance for covering childless adults? – Those two improvements for Wisconsin won’t take effect until 2013 and 2014, respectively. However, a provision of the bill that takes effect today (4/1/2010) could bring Wisconsin additional federal aid if the state were to file a Medicaid plan amendment to cover childless adults. For more on that topic, see the April 1 Kaiser Daily Health News. Such an amendment might enable Wisconsin to get federal Medicaid matching funds for childless adults, rather than having to use our disproportionate share hospital (DSH) funding for that purpose. On the other hand, that option might require enhancing the current BadgerCare Plus Core Plan benefit package and making the program an entitlement without a waiting list – at least for childless adults below 133 percent of the poverty level. Although those could be significant challenges, the state should explore the new options to see if the new law would allow the current level of state funding to leverage more federal dollars and eliminate or reduce the Core Plan waiting list.
