As COVID strikes, Medicaid spikes. And tax dollars flow around as a result

The Department of Health Services was slated to give its quarterly update on Medicaid costs and projections for the 2019-21 budget on Tuesday, and Secretary Andrea Palm told the Joint Finance Committee basically "things are so crazy that we can't tell you where things are going to stand."

The current environment has rendered the previous projection [of Medicaid costs] obsolete. Hospitals, nursing homes, and other health care and long term care providers will be stretched to the limit as they care for individuals suffering from COVID-19. The Department has issued a number of Medicaid policy updates and alerts to safeguard the health and well-being of members, providers, and the public during this public health emergency. The Department is also working with the Legislature to pursue a temporary federal waiver approval for more flexible requirements for providers during the COVID-19 ememrgency period related to reimbursement, allowable settings, certification and other topics. These measures will help providers respond more effectively to patient care needs while also boosting the volume of provider claims submitted to the Medicaid claims system.

In addition, the Department of Workforce Development has experienced a dramatic increase in the daily number of claims for unemployment benefits in recent weeks. Medicaid enrollment is very sensitive to economic conditions, especially the state's unemployment rate. As unemployment increases, Medicaid enrollment is expected to rise in a commensurate way.

For past history, let's look at what happened with Wisconsin's Medicaid enrollments with the last recession in this country. As the state's unemployment rose from 4.7% in July 2008, crested at 9.3% in January 2010, and was still at 8.6% in June 2010, BadgerCare Plus enrollments jumped by more than 200,000, to the point that a cap had to be put on because of a lack of state funds.

That doesn't include the extra costs per enrollee on top of the 200,000+ additional enrollments. And that was with a much more gradual increase in unemployment than we are going to see with all of the coronavirus-related shutdowns.

But while the state is looking at significant increases in Medicaid expenses in the coming months, they also are set to get more help the Federal government. A big source of extra assistance comes from one of the recent stimulus bills, which gives a higher level of coverage from the Feds for all Medicaid expenses.

However, the state put in some "tough on welfare" rules during the Age of Fitzwalkerstan that could cost state taxpayers hundreds of millions of dollars.

Wisconsin was initially slated to miss out on a 6.2% increase in Medicaid funding because the state was not compliant with conditions laid out in the second of three recent coronavirus-related relief packages passed by Congress. The bill dictates, among other things, that premiums for Medicaid members were not increased after Jan. 1 and there are no cost-sharing requirements for COVID-19 testing and treatment.

On Feb. 1, Wisconsin made a series of changes to BadgerCare Plus for childless adults, including adding monthly premium payments and copays for emergency room visits. These policy changes violate the legislation’s conditions.

WHOOPS! Sounds like something that needs to be fixed. Unfortunately, the lame duck laws that the GOP Legislature passed after Tony Evers beat Scott Walker is slowing down the ability of the state to change policies and get this extra money, and Wisconsin Congressman Mark Pocan says that while the state got bailed out for the first 3 months of 2020, there needs to be action in 2 weeks to avoid losing that money.

Pocan said "one of the last changes to happen" to the third relief package, colloquially known as the CARES Act and signed into law last month by President Donald Trump, would allow Wisconsin to receive the increased funding in the first quarter despite the state’s changes to its Medicaid program.

Pocan warned the Wisconsin Legislature would have to take steps in order to get additional funds going forward. Wisconsin will become ineligible for the increased federal funding on April 17 if lawmakers do not make necessary changes to the state’s Medicaid program.

“We were able to get the Wisconsin fix (in the bill), but it's for the first quarter,” Pocan said. “The legislature will have to deal with (making additional changes).”

So add that to the list of COVID-19 adjustments that are going to have to be done in the coming weeks, which goes well beyond whether we are going to endanger Wisconsinites by having an election on Tuesday that may force large numbers of people into enclosed places.

Medicaid is by far the largest expense that the state of Wisconsin has to take on, and the amount that is going to be paid by that program over the last`15 months of this budget cycle looks like it is going to be quite a bit more than anyone counted on. But the question to be resolved is how much are we going to allow the Feds to pay for it, how much are state taxpayers going to shell out, and whether we have to move other money around to make sure low-income Wisconsinites have their health needs met.