Feds OK changes that would bump thousands from Medicaid

By Jason Stein of the Journal Sentinel

April 27, 2012 6:38 p.m.

http://www.jsonline.com/news/statepolitics/feds-ok-changes-that-would-bump-thousands-from-medicaid-9756p1e-149314265.html

Madison - Federal officials have signed off on plans by Gov. Scott Walker's administration to cut costs in state health programs that will lead to an estimated more than 17,000 people leaving or being turned away.
President Barack Obama's administration announced late Friday it had approved the changes after previously requiring the Walker administration to scale back the cuts, which would have originally affected 64,800 people. The changes will cause some adults to leave the program but will shield children from impacts originally proposed by the state.
But other possible federal issues remain for the state. Federal officials, for instance, are also threatening to withhold federal funding for state long-term care programs unless the state shows it is complying with federal rules.
The Joint Finance Committee already approved revised Medicaid cuts last month on a party-line vote, with all Republicans in favor and all Democrats against.
There were no immediate figures on how much the final actions will save.
The state is making the cuts to bridge a gap in the Medicaid program, which still faced a projected deficit of about $128 million through June 2013 as of March. The Walker administration is making other ongoing efforts to close that remaining gap through spending cuts.
"Current law allows states to make changes to eligibility for non-pregnant, non-disabled individuals above 133% (of the federal poverty limit) when the state has a budget deficit. Wisconsin has certified a budget deficit and is therefore permitted to make changes in the program that would affect some of the adults in this group," Alper Ozinal, a spokesman for the federal Centers for Medicare and Medicaid Services.
The Medicaid health plans cover about one in five state residents - roughly 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, the Walker administration sought to increase premiums for tens of thousands of others by up to nearly tenfold and drop coverage for certain participants for at least a year if a family misses a payment.
"These changes aim to preserve the core, safety-net functions of the program for low-income individuals and are necessary in order to keep the Medicaid program sustainable," state Health Services Secretary Dennis G. Smith said. "We would like to personally thank (federal Health and Human Services) Secretary (Kathleen) Sebelius and her staff in CMS in working with us to agree upon a commonsense plan that ensures individuals will continue to have access to affordable health insurance."
Advocates have said they're 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.
"We're very disappointed that the state is going to make the choice of moving 17,000 people out of the program but we're relieved that the federal officials determined the health-reform law protects coverage for children and low-income parents," said Jon Peacock, research director of the Wisconsin Council on Children and Families.
Medicaid programs like BadgerCare Plus and Family Care are jointly paid for by state and federal taxpayers, with the state budgeting to pay nearly $7 billion in state and federal money for them this year. State spending is up significantly, but overall spending in the program will decline this year by an estimated 7% because a surge of federal aid money has run out.
Walker administration and Republican lawmakers have said the state has no other options to deal with the health programs besides raising taxes. They note that Medicaid programs are gobbling up more and more of the state budget and squeezing out other key priorities like schools.
Democrats have 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.
The changes would take effect in July and would:
Increase BadgerCare Plus premiums sharply for families with incomes of more than 1 1/3 of the federal poverty limit - $25,390 a year for a single parent with two children. The new premiums would be between 3% and 9.5% of household income, depending on how much the recipients made and would amount to $29 million more for more than 30,000 recipients. The Walker administration dropped a proposal to raise premiums on children.
For instance, a single parent with two children who makes more than $28,635 a year would typically see his or her annual premiums rise to $1,145 - 9 1/2 times more than the current premium of $120 a year but less than the previously proposed increase to $1,432 a year.
Democrats said the premium increases were unacceptably high. Republicans said those premiums were still less than private-sector workers or state employees would be charged.
Drop adults making more than 1 1/3 the federal poverty limit from the program for one year if participants fail to pay their monthly premium without a valid excuse. Currently, adults are dropped for six months for failure to pay, but children are not. The Walker administration had previously proposed dropping both children and adults from the program for one year.
Prevent adults making more than 1 1/3 the federal poverty limit from receiving BadgerCare Plus if they can get access through their employer and their share of the premium is below 9.5% of their income. The state also wanted to apply that provision to children.
A separate cost-saving proposal already approved by the state but also still awaiting federal approval would move more than 300,000 people in BadgerCare Plus - more than half of them children - into a plan with lower costs for taxpayers but fewer benefits for recipients. Republicans have said the benefits would still be attractive when compared with private plans.
Separately, the federal government also asked the state in a March letter to ensure the state is complying with federal rules surrounding the Family Care program, which provides long-term care to elderly and disabled individuals outside of nursing homes.
The state capped enrollment in the program last summer to hold down costs. Walker announced plans in December to allocate $72 million to resume enrolling people in Family Care, following an order from the federal government, and Walker signed legislation to do it last month.
The federal government wants to make sure the state is notifying citizens of the change and helping any affected people who were improperly prevented from receiving care as a result. The state says it's meeting those requirements but there has not been a final response from federal officials.

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Wisconsin Alliance for Women's Health

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