DHS Warns BadgerCare Participants of Likely Terminations, but Capacity to Make Correct Eligibility Determinations Is Still Months Away
The Department of Health Services is sending notices this week to about 56,000 households now participating in BadgerCare, notifying them that adults in the family could lose their BadgerCare eligibility at the end of the year.
From the perspective of a health care advocate, I think there’s a lot not to like about this development. Nevertheless, I agree with DHS that it’s important to notify people now that a lot will be changing in January, because many BadgerCare participants should begin exploring alternatives in the new health insurance Marketplace, which begins accepting applications on October 1.
That said, what would be far preferable is to hold off on terminating eligibility of BadgerCare participants for being above the poverty line – until such time next year as the state is able to correctly apply the new Affordable Care Act (ACA) standards for determining income and household size.The source of the problem is that our state is lagging in being ready to apply the new standards, known as Modified Adjusted Gross Income, or MAGI. As I understand it, the state still won’t have MAGI software in place in mid-November, before it does a November 23 computer run to decide who will be cut off BadgerCare in January. And even it the MAGI rules were used for that computer run, that wouldn’t fully remedy the problem because DHS is doing that computer run before the state takes steps to ensure that case files contain the information that is needed to determine eligibility using the MAGI standards.
I think the sources of the inaccurate assessments of eligibility can be grouped in two general categories: one related to new rules for counting income, and the other pertaining to the changes in measuring household size. An example of the first challenge is that starting in 2014 the ACA will no longer count child support as income. The letters going out this week don’t account for that significant change, and apparently it won’t be remedied in November!
Even if that particular problem is resolved in November, a more difficult set of challenges remains. The problem is that household size will be determined based on new standards that generally follow IRS rules. For example, in a three generation family with a parent who supports her son and her mother and claims both as dependents, the mother and her son should be treated as being in a family of three, whereas they are now considered to be a family of two. That won’t be fixed in November because some of the key information for the new family size determinations simply isn’t in the case files now.
Fortunately, the federal Marketplace has the correct software in place, and as they take applications they will gather all the required information. The Markeplace should be able to make accurate BadgerCare eligibility determinations, and the state will accept those determinations. That’s one of the reasons why it makes sense to start telling people to apply in the Marketplace soon after October 1 — especially since there is likely to be a surge of people applying in November and December, which could make it very difficult for BadgerCare participants to get the information and assistance they need. (Read more in the Legal Action of Wisconsin guidance for people receiving the DHS letters.)
Sending out the letters now is a good idea. However, an even better plan would be to delay the terminations of BadgerCare coverage until the state has made a full and accurate determination of eligibility, and to do so at a point when it will be less difficult for people to get timely assistance.
Jon Peacock
