I mentioned this in the comments of my post on Friday mentioning that the state's revenue shortfall was now nearing $200 million. There was other bad budget news in Wisconsin on Friday, as the quarterly Medicaid report to the Joint Finance Committee indicated that the General Fund shortfall for that program had exploded from $20.3 million to $93 million in the last 3 months.
So why did Medicaid fall so deep into the red? Let's go to the report and find out.
...enrollment of adults without dependent children in Badgercare Plus has been higher than assumed in Act 20, the 2013-15 biennial budget. The budget had assumed childless enrollment would reach approximately 99,000 by the end of FY15. (June 30, 2015) Through May 2014, 103,126 individuals had already enrolled. The fast pace of enrollment can be attributed in part to the outreach efforts undertaken by the Department and numerous community partners to inform individuals of BadgerCare Plus changes implemented on April 1. While enrollment has outpaced budget assumptions, it shows the Governor's goal of providing access to Medicaid coverage to those individuals living in poverty. (Those last two sentences kill me, because Wisconsin spent the lowest amount of money per capita out of any of the 50 states on Obamacare outreach, trying to TeaBag it as much as possible- and now they're trying to take credit for so many people signing up).And here's the killer part about these extra costs. THE STATE COULD HAVE AVOIDED ALL OF THEM. How? By simply accepting the expanded Medicaid funding in Obamacare, which would have had the feds take 100% of those costs associated with these new signups between now and the end of 2016, and only falling to 90% in 2020. Instead, Walker decided opposing Obama and showing off for GOP national types was more important than being fiscally responsible, and chose to cover these individuals under traditional Medicaid, making the state pay approximately 42% of those costs. It is a decision that was estimated at the time to cost state taxpayers an extra $105 million (later upped to $119 million) and cover 75,000 fewer Wisconsinites, and now those blown cost savings are even higher with more low-income childless adults enrolling.
It is difficult to predict enrollment growth (in BadgerCare Plus) for the rest of the biennium....Adopting a cautious approach from a fiscal standpoint, this estimate assumes childless adult enrollment will reach 135,000 by June 2015.
Walker and WisGOP's other gamble as part of this TeaBagging of Obamacare was to throw off tens of thousands of parents and caretakers from BadgerCare Plus, and instead make them get insurance through Obamacare's federal exchanges. In addition to being cruelly disruptive to these people's lives, the cynical intent was to overload the exchanges in the hope that they wouldn't work well. But after the initial difficulties with the Obamacare website in October, Wisconsinites were able to get coverage, and enrollment numbers far exceeded the feds' expectations, with more than 140,000 people getting coverage.
Oddly enough, the state's DHS did say that the Medicaid deficit would be even worse, except that they were "successful" in ending state coverage for many of these parents and caretakers.
The higher enrollment for those childless adults is partially offset by lower-than-projected growth for BadgerCare Plus parents and children. Under the Governor's entitlement reforms, parents and caretakers above 100% FPL transitioned to private coverage in the federal insurance marketplace as of April 1. Act 20 also assumed that caseload for parents below 100% FPL and for children would increase through the biennium due to the federal individual insurance mandate and possible changes in employer sponsored care. Actual enrollment through May for these two groups is below budgeted assumptions, and this estimate assumes slow growth through FY 15.
This shouldn't shock you too much, I predicted we'd have this type of shortfall when I looked at the DHS enrollment figures for April and saw the huge increase in childless adults (you can click this link to see the figures through May, it's mostly the same story). What makes me angry about it is that it is a self-inflicted wound that could be healed tomorrow by simply doing the right fiscal thing and take the Medicaid funding. But Walker is still operating under the delusions that he's some kind of 2016 presidential contender and that being against Obamacare would be a winning position among non-racists with IQs over 80, so he and his WisGOP buddies in the Legislature won't take this obvious step that's a win-win for both the budget, and the people of Wisconsin.
And so our deficit in Wisconsin continues to balloon, and these new Medicaid numbers along with the revenue shortfall show we not only are looking at a structural deficit around $1 billion for the next budget, we also have to mend this current budget, as the $100 million cushion built into it won't be enough. Guess it's yet another Walker mess that Governor Burke will have to dig us out of in 6 months.