Medicaid gap closes - THANKS OBAMACARE!

I was waiting to see what would happen when the state’s Department of Health Services gave its quarterly report on the Medicaid budget this week. This same report showed that there was a $93 million deficit projected in this fund at the end of June, so with an already-growing budget deficit coming on for Fiscal Year 2015 and the 2015-17 budget, the state couldn’t afford another budget hole to drag itself out of.

And it looks like that bullet has been dodged- for now. The Third Quarter Medicaid report shows that the $93 million gap has been almost entirely wiped out. So what explains the turnaround? Let’s look at what DHS has to say about it.

First, the Department has allocated $51.2 million in revenues from settlement payments from drug manufacturers to cover Medicaid benefit costs. The drug companies made these payments to the state to settle lawsuits alleging they improperly charged the Medicaid program for medications for Medicaid recipients. Prior quarter projections had not included these settlement revenues because it was uncertain how much revenue would be received this biennium. The $51.2 million represents available revenue this September.

I guess that’s a nice way to solve a budget problem- use a one-time shot of fines from crooked drug companies. But that doesn’t really seem to be sustainable long-term.

The other reasons singled out are also quite interesting.

· Costs per enrollee for BadgerCare Plus adults without dependent children is projected to be lower due to the age/gender mix of individuals enrolling in recent months.
· Enrollment growth in Family Care and IRIS has been slower than projected.
· Final year-end payments in FY14 were smaller and SEG revenue balances were higher than projected (basically filling some of the gap with non-taxpayer funds from other sources).
· Per-person costs for individuals in BadgerCare Plus are projected to grow more slowly in CY 15.

In other words, THANKS OBAMACARE! We’re seeing this trend nationwide, where the rate of health cost increases are going down- just like Obamacare proponents said they would. Take a look at this report from early September.

Estimates of U.S. health-care spending for the next five years have been lowered by two federal agencies, and the Patient Protection and Affordable Care Act is getting much of the credit.

U.S. health spending in 2019 will be $4 trillion, the Centers for Medicare and Medicaid Services said …$500 billion less than the agency projected in 2010 when President Barack Obama’s health-care overhaul became law. That announcement followed by a week a report from the Congressional Budget Office lowering its five-year cost estimates.

Obamacare has been criticized by Republicans as costly and unsustainable. Now, four years after its arrival, the law’s mandated program cuts and the medical practices it encourages -- limiting unneeded procedures, and keeping people out of the hospital longer -- are cited by economists as key ingredients in trimming the nation’s medical bill. While the recession has had an influence on the cost slowdown, it doesn’t explain it all, according to policy analysts and the CBO

The "lower costs for childless adults" part of the DHS’s report is especially noteworthy, because it destroys a talking point the GOP anti-Obamacare hacks had (that a lot of the people enrolling would be the sick and would require a lot of care and cost). Imagine how much better Wisconsin’s Medicaid fund would have looked had we expanded Medicaid and had the feds pay for all of it under Obamacare?

While Obamacare and one-time injections of funds have stabilized the Medicaid numbers, it doesn’t change the fact that we still have a $760 million hole to fill in the next state budget under the current Walker/WisGOP plan, and fixing it will be a major challenge for whoever is in power in 3 months.

And by the way, that’s assuming the amount of childless adults enrolling in Medicaid levels off from where we are now. A quick look at enrollment figures through August shows how this demographic has come out the woodwork to sign up and get covered since they became eligible to do so in April 2014.

Childless Adults on Medicaid, Wisconsin
June 2012 24,292
June 2013 17,791
March 2014 13,923
April 2014 96,140
May 2014 103,126
June 2014 111,432
July 2014 119,090
August 2014 124,778
INCREASE SINCE MARCH 2014 110,855
INCREASE SINCE APRIL 2014 28,638 (+29.8%)

Given this rapidly increasing enrollment, and the fact that parents and caretaker enrollment in Medicaid has only gone down by 47,338 since March (meaning the net change is over 63,500 more people going on BadgerCare), I’ve got a small fiscal suggestion. Maybe expanding Medicaid to have the taxpayers across America pay for these people’s medical services is a better idea than having us pick up 42% of the cost of these new Medicaid recipients, and driving our budget even further into deficit. Whaddya think?

PS- For other interesting Medicaid/ Obamacare reading, check out Citizen Action’s release today on which Wisconsinites lost their health insurance because of Gov Walker’s “reforms” that removed them from BadgerCare in April. Many counties had half or more of those who lost their BadgerCare coverage end up uninsured, and every one of the ten counties that had the percentage of BadgerCare recipients fall to this fate are in rural parts of Central and Northern Wisconsin.

All 10 of these counties also voted for Walker in the 2012 recall election. Think those areas will still “Stand with Walker” come November?