Friday, November 18, 2011

MOE Waiver: What's the Difference Between Approval and Denial for the Future of BadgerCare? 


The Wisconsin Department of Health Services (DHS) recently submitted a request to federal officials for approval to make sweeping changes in the BadgerCare program. Most of those changes conflict with provisions in the federal health care reform law requiring states to maintain current standards relating to eligibility and enrollment. So DHS is seeking a waiver of these so-called “maintenance of effort” (MOE) requirements in order to implement it's plan for dramatic cuts to BadgerCare spending.

Here's the catch: If Wisconsin is not granted an MOE waiver by federal officials by December 31, 2011 (an arbitrary, self-imposed deadline), the state budget bill directs DHS to lower the BadgerCare income limit for adults from 200% of the federal poverty level (FPL) to 133%. That would result in 53,000 adults losing their BadgerCare coverage. So it's important to understand what's at stake in the federal government's decision regarding the DHS waiver request. Neither outcome is appealing. Regardless of whether or not the waiver is granted, tens of thousands of people in Wisconsin are going to lose their health insurance. But there are significant differences between how the two decisions would affect participants, such as who will lose their coverage, how coverage will change, how much less money the state will spend, and how much more it will cost families to stay covered.

Based on analysis from the nonpartisan Legislative Fiscal Bureau, approval of the MOE waiver will result in nearly 65,000 Wisconsinites losing their BadgerCare coverage. Nearly half of those (over 29,000) would be children. As noted above, if the waiver is not granted and the income limit is lowered to 133% of the poverty level, about 53,000 people--all of them adults--would lose their BadgerCare coverage.

Another key difference is in the total number of people affected. If the waiver is rejected, those 53,000 adults would be the only people affected for the time being. The impact of a successful waiver would be felt by more than triple that number (over 168,000), in the form of higher premiums and copays, reduced services covered, and a variety of other changes.

These are just a few of the differences between what will happen if the waiver is granted and what will happen if it not. The Legislature could also choose to push back the self-imposed December 31 deadline in order to work out a better solution, but that does not seem to be a likely scenario. We have posted to our website a more complete comparative analysis of the waiver /no waiver impacts in handy, easy-to-read table form.

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