Lawmakers OK changes that could drop 65,000 from MedicaidMadison - The Legislature's nonpartisan budget office projects 65,000 people - nearly half of them children - would leave or be turned away from the state's health programs for the poor, under a proposal passed by lawmakers Thursday.
The Joint Finance Committee approved 11-4 a proposal by GOP Gov. Scott Walker's administration to help bridge a more than half-billion dollar budget gap in the rapidly growing health plans. All Republicans voted in favor and all Democrats against.The proposal doesn't need any further approval from state lawmakers but must still win federal approval from President Barack Obama's administration by the end of the year - a significant hurdle.The Medicaid health plans cover about one in five state residents - almost 1.2 million people - and provide everything from doctor visits for poor families to nursing home care for the elderly. To help control rapidly increasing costs in the programs, Walker's administration wants to decrease benefits for a quarter of a million recipients, increase premiums for tens of thousands of others by up to tenfold, and drop coverage for adults and children for at least a year if a family misses a payment.
Advocates said they were concerned about the impact of the changes, particularly on the participants who will end up leaving the program because they lose their eligibility or because they can't or won't make the higher premium payments.
"Most of them will probably end up uninsured and will no longer have access to preventive health care when they need it," Jon Peacock, research director for the Wisconsin Council on Children and Families, said before the hearing.
Medicaid programs like BadgerCare Plus and Family Care are jointly paid for by state and federal taxpayers, with the state budgeting to pay $6.73 billion in state and federal money for them this year. State spending is up significantly, but the overall spending in the program will still decline this year by an estimated 7% because a surge of federal aid money has run out.
The Walker administration and Republican lawmakers said the state has no other options to deal with the health programs besides raising taxes. They noted that Medicaid programs are gobbling up more and more of the state budget and squeezing out other key priorities like schools.
They said some other states are simply booting recipients from the program even if they have no other options. State Health Services Secretary Dennis Smith, who formerly oversaw Medicaid programs for the federal government under then-President George W. Bush, said the Wisconsin proposal would have "national significance."
"Under our approach, individuals would lose coverage only if they make the choice not to pay a fair share of their coverage," Smith said, adding later, "We're at least giving people a choice."
Smith and Rep. Robin Vos (R-Rochester), the co-chairman of the Joint Finance Committee, said that they believed many of the people who leave the program will go to private insurance instead. But the Department of Health Services offered no estimate on how many would be able to get private coverage.
"All of us wish we could do more but the money just isn't there," Vos said before the hearing.
Democrats said Republicans had approved tax breaks for businesses and the wealthy this year that worsened the cuts. The Democrats said some uninsured will get sick and receive expensive emergency room care, pushing costs off on Wisconsin hospitals and the insured patients who go to those hospitals.
According to the Legislative Fiscal Bureau, the proposals would save $298 million over two years and would also :
Move 263,000 people in BadgerCare Plus - more than half of them children - into a plan with lower costs for taxpayers but fewer benefits for recipients. Smith said the benefits were still attractive when compared with private plans.
Increase BadgerCare Plus premiums sharply for families with incomes of one and a half times the federal poverty limit. The new premiums would be 5% of household income, a change that would have a varying impact for families according to income.
For instance, a single parent with two children who makes more than $27,795 a year would typically see his or her annual premiums rise to $1,390 from $120 - a more than tenfold increase. In all, the higher premiums would apply to 91,500 BadgerCare Plus participants - almost two-thirds of them children.
Democrats said the premium hikes were unacceptably high. Republicans said those premiums were still less than the private sector would charge.
Drop both adults and children from the program for one year if participants failed to pay their monthly premium without a valid excuse. Currently, adults are dropped for six months for failure to pay but children are not.
Put in new eligibility standards such as checks to make sure participants live in the state.
Make little or no cuts for low-income disabled and elderly participants, who account for much of the costs in Medicaid.
The committee chose not to make up for a hole of at least $45 million in the program's budget, which could prove a future financial trap. That shortfall opened after the state learned that it wouldn't receive a windfall in federal money to make up for certain past Medicaid costs improperly charged to states like Wisconsin.
Rep. Tamara Grigsby (D-Milwaukee) said that she believed many poor families would drop out of the program because they don't have the money to afford the new premiums.
"That doesn't sound like a choice to me," Grigsby said. "We're giving them a heck of a Christmas gift, a heck of a holiday surprise."
The state will need approval by Dec. 31 from the federal government to make the proposed changes. Otherwise, Wisconsin could be forced to generate immediate savings by dropping 53,000 adults from its health plans under that year-end deadline included in the budget law passed this summer by Republican lawmakers and Walker.
Democrats question whether the federal government will have enough time to consider the proposal, given that it can take several months to decide on such requests from states.
Over the past 20 years, the Medicaid rolls in Wisconsin have increased at nearly 10 times the rate of population growth, according to state figures. That increase has been driven both by state and federal expansions of the program and by the difficult economy.
Increased federal support from the 2009 economic stimulus law and later extensions helped pay those rising costs in the last state budget, but that extra funding has ended.
In the 2011-'13 state budget, Republicans put an additional $1.2 billion into Medicaid programs to help cover the added costs. But to close a $3 billion deficit for the state's overall two-year budget, the Walker administration said it needed to find $554 million in additional savings in state and federal money.
In other action Thursday, the committee voted 13-2 to approve a plan for distributing cuts in funding that goes to counties to ensure parents make their child support payments. The 22% cut in the aid for enforcement efforts statewide works out to a preliminary figure of $2.5 million less for Milwaukee County in both 2012 and 2013.
According to a memo from Milwaukee County, that could lead to 27 lost county positions and $12 million in lost child support collections.
The committee also voted 14-1 to provide $10 million in funding over the next two years for a statewide computer system to track student learning across Wisconsin's hundreds of school districts. That's $5 million less than the state budget had set aside over those two years.