The weekly newsletter of the Wisconsin Hospital Association (WHA) announced Friday that their Board of Directors decided unanimously on January 30 to support “lifting the existing enrollment freeze in BadgerCare Core for childless adults with incomes below 133 percent of the federal poverty level (FPL).”
The rest of the newsletter article elaborates on that position and makes it clear that the Association now supports taking advantage of the opportunity in the ACA to capture federal funding that will reimburse the full cost from 2014 through 2016 of extending BadgerCare to newly eligible adults below 133% of FPL (which is equivalent to 138% after a 5% income disregard is included). Until now, WHA had been on the fence about using that ACA option, even though hospital groups in many other states have enthusiastically endorsed it. The WHA statements focus attention on the fact that this group – low-income adults without dependent children – isn’t a new category that the state would be covering. With bipartisan support, the state began covering this group in 2009, but a moratorium on new enrollment has allowed that BadgerCare Core Plan coverage to shrink dramatically (from 65,000 in January 2010 to only about 20,000 now).
Although the current eligibility ceiling for BadgerCare Core is 200% of the poverty level, the Hospital Association position is to serve just the adults below 133% of FPL – which is the step the state needs to take to get the enhanced federal reimbursement rate (100% of costs from 2014 through 2016, gradually declining to 90% in 2020).
Their statement also notes the likelihood that not seizing this opportunity would increase the number of people who are uninsured, boost the amount of uncompensated care, and increase cost shifting onto their insured patients. According to WHA President Steve Brenton:
“Above all, our hospital and health system members—national leaders in innovation and reform—are looking for stability, especially when it comes to covering our most vulnerable populations. We believe WHA’s position is a measured approach that makes good fiscal and policy sense. There will be much debate on this issue with valid opinions on both sides, but at the end of the day, in this time of uncertainty, we cannot have fewer people with coverage and more uncompensated care.”
Hospitals generally get higher reimbursement rates for people in private plans, so they would prefer to see maximum use made of exchanges, when that is a realistic option. However, exchange subsidies aren’t available for people under the poverty level, and the cost-sharing for exchange coverage is probably going to keep private insurance unaffordable for many low-income adults over the poverty level. The newsletter indicates that WHA would like to see the state maximize the use of private coverage if or when exchanges can be made to work for lower income adults:
“WHA is open to reforms that transition this population, some of whom are currently enrolled in Medicaid, into premium-subsidized, private-market exchanges, but only if and when those exchanges can show a track record of success.”
They make the important point that using the Medicaid option is not an irrevocable decision – states can “pull out of the eligibility expansion at any time.” That flexibility would allow the state to reconsider its choice to expand if policymakers later conclude that the exchanges are a viable alternative for low-income people in the state. That sort of conditional endorsement of closing the gap in BadgerCare coverage seems to me to be a logical and reasonable compromise.
Jon Peacock
