Monday, June 3, 2013

The Medicaid foolishness on tomorrow's agenda

Big day at Joint Finance tomorrow, as the Committee plans to discuss the last 3 huge issues still remaining in the state budget- Medicaid, voucher school/K-12 public school funding, and possible tax cuts. I want to focus on the Medicaid part in this post, as there are a lot of options on the table, and (in a stunner), our governor seems to continue to be set on preferring the one with the most cost to state taxpayers, with the least amount of coverage.

The Medicaid budget paper goes over all of the options on the table, including the Governor's "Work Makes You Free" plan. Basically what Walker's plan does is turns down the Obamacare offer (listed as the ACA in the paper) of expanded Medicaid funds to people with incomes at 133% of the poverty level or below, and instead limits fully-paid BadgerCare (the state program) to individuals making 100% of poverty, and pregnant women to 133% of poverty (it was previously at 3 times the poverty level). On the flip side, it also has a possible expansion of the coverage amounts for children, particularly younger children, and adults without kids who make poverty level or below could now join the Badgercare core plan. I ripped that plan as an expensive and pointless pose for right-wing bubble world when it was first announced in February, and the LFB says it looks even worse today. Ironically, some of the reason Walker's plan won't get savings is due to the fact the Wisconsin DHS kicked off numerous potential Badgercare recipients in the last year by raising their premiums.
As to aspects of the Governor's proposal expected to reduce MA costs, the most significant is the reduction in MA eligibility for parents and caretakers from 200% to 100% of the FPL [Federal Poverty Level]. Funding in the bill assumes approximately 98,900 such adults would lose their program eligibility effective January 1, 2014 due to this change. Broadly stated, the bill assumes that savings realized by removing these individuals from the program will offset the cost of extending MA coverage to childless adults under the revised Core Plan in the 2013-15 biennium.

Based on additional review by this office and DHS, several of the bill's assumptions should be adjusted. As noted, the bill assumes savings from ending MA coverage for 98,900 parents and caretakers effective January 1, 2014. That estimate was based on the income distribution of BadgerCare Plus adults as of March 2012. Since then, the number of adults in the program with family incomes greater than 100% of the FPL has declined, largely due to the premium changes DHS implemented in July 2012. The current figure, which continues to decline each month, is approximately 88,500. Because there are fewer adults in the program with incomes greater than 100% of the FPL, less state savings would be realized by terminating their coverage on January 1, 2014.

Furthermore, that current enrollment figure of 88,500 includes approximately 19,300 adults in transitional MA with incomes above 100% of the FPL. The bill assumed all these adults would lose their MA eligibility on January 1, 2014, despite permanent provisions in federal law that require states to provide four months of transitional MA benefits. In recognition of this federal requirement, the administration has recommended the changes to the bill described in Discussion Point 5 (basically, the Walker folks got caught trying to break the federal rules, and now will have to pay up through April 30, 2014 in order to follow those rules). It has also adjusted its cost projections [higher] for this item accordingly.

The bill also misallocated the projected total cost of the Governor's MA proposal between the MA cost-to-continue item and this item. This related to the manner in which the bill accounted for projected ACA-related enrollment effects. While this did not change the total funding in the bill for the Governor's proposal, it had the effect of assigning too great a share of those costs to the cost-to-continue item, and too little to this item. D'oh!
The Walker plan also overassumed the amount of Federal money it was going to get under this plan, because they thought they could sneak off with the higher Obamacare coverage rates for certain people. Turned out, they were wrong, and so that'll also cost us more money. Here's the upshot.
The revised estimate for the Governor's combined MA proposal (the MA cost-to- Health Services -- Medical Assistance and Related Programs (Paper #321) Page 15 continue and this item) is $734.1 million GPR in the 2013-15 biennium. That is $73.5 million GPR higher than the funding provided for those two items in the bill.
Oops. Then the LFB compares it with the option that would take Obamacare's expanded Medicaid funding, and expand coverage to all people with incomes of 133% of poverty or below. The LFB calls this the "133/133" option, and it's an obvious win-win of additional people covered, and less cost to state taxpayers.
...the administration estimates that, on average, 37,500 more individuals would be enrolled in BadgerCare Plus and the revised Core Plan in 2013-14 under the 133/133 alternative than under the Governor's proposal. In 2014-15, the administration estimates there would be, on average, 84,700 more individuals enrolled under the 133/133 alternative than under the Governor's proposal. These additional enrollees would be non-elderly adults with family incomes between 100% and 133% of the FPL.

Despite these additional enrollees, the projected GPR costs in 2013-14 are $26.5 million less under the 133/133 alternative than under the Governor's proposal. The reason is that beginning January 1, 2014, the childless adults under the 133/133 alternative would qualify for the ACA's "newly eligible" FMAP, whereas the childless adults with family incomes up to 100% of the FPL under the Governor's proposal would not. The projected GPR costs in 2014-15 are $92.5 million less under the 133/133 alternative than under the Governor's proposal, again due to the ACA's enhanced FMAP for childless adults. Over the 2013-15 biennium, the estimated GPR costs for the 133/133 alternative are approximately $119.0 million less than the Governor's proposal.

The revised estimates also indicate that the state would receive approximately $489.0 million in additional federal MA matching funds in the 2013-15 biennium under the 133/133 alternative than under the Governor's proposal. This projected FED increase is greater than the projected GPR difference between the two proposals because the additional FED would stem not just from the ACA's enhanced FMAP for the childless adults projected to enroll in MA under both proposals, but also from the following: (a) the ACA's 100% federal match for the additional childless adults projected to enroll in MA under the 133/133 alternative, compared to the Governor's proposal; and (b) the federal matching funds (at the state's standard FMAP) for costs associated with the additional parents and caretakers projected to participate in MA under the 133/133 alternative.
The LFB also estimates that taking Obamacare's expanded Medicaid will bring in another $708 million to the state from the feds in the next budget for 2015-17 And what about the talking point from RW propagandists regarding worries that Obamacare won't be fully funded for the future? (leaving out the fact that the only group that would do this would be....fellow TeaBaggers) The LFB takes that on as well, and shows it's still much cheaper to take the Obamacare funds.
If members are concerned about the state's ability to claim the ACA's enhanced FMAP for "newly eligible" individuals in the 2013-15 biennium or after (in the event Wisconsin decides to implement a "full expansion"), one option would be to require DHS to reduce eligibility for non-pregnant, non-elderly childless adults who are not otherwise eligible for MA from 133% to 100% of the FPL if either of the following occurs: (a) CMS determines that the state cannot claim the ACA's "newly eligible" FMAP (the % of costs covered by federal dollars) for these individuals; or (b) the ACA's FMAP for "newly eligible" individuals is repealed or reduced (not including the scheduled decline in that FMAP beginning in 2017).

A related concern with respect to federal funding is that after 2016, the ACA's enhanced FMAP for newly eligibles is scheduled to decline to 95% in 2017, then to 94% in 2018, 93% in 2019, and 90% in 2020 and beyond. Therefore, states that expand MA today will face an increasing share of the costs for those expansion populations starting in 2017.

It is difficult to project MA expenditures into the next decade. Based on the revised estimates cited above, however, the GPR share of MA benefit expenditures in the 2015-17 biennium would be approximately $170.0 million less under the 133/133 alternative than the Governor's proposal. That projection is based on the estimated GPR cost difference between the two proposals in 2014-15 ($92.5 million), doubled to reflect a two-year biennium, and adjusted to incorporate the scheduled decline in the ACA's enhanced FMAP to 95% starting January 1, 2017. Thereafter, the projected GPR cost difference between the proposals narrows to $110.3 million in the 2017-19 biennium and $60.5 million in 2019-21.
So let's do the numbers on this- taking the Obamacare funds would not only cover many more people in Wisconsin, but it would also cost state taxpayers a helluva lot of money

Extra GPR expenses, Walker plan vs. taking Medicaid
2013-2015 $119.0 million ($73.5 million extra from the Guv's budget numbers)
2015-2017 $170.0 million
2017-2019 $110.3 million
2019-2021 $60.5 million
TOTAL EXTRA COSTS $459.8 million

It is absolute foolishness for the state of Wisconsin not to take Obamacare's expansion of Medicaid, from both a fiscal point of view, and in getting more Wisconsinites covered. But as we've seen for the past decade, Scott Walker Republicans don't care about liberally-biased things like numbers or facts, as long as they can satisfy the brain-deads who spend all day getting their "facts" from places like AM620 and AM1130.

So we'll see tomorrow if the JFC chooses to "create their own reality," and potentially screw more than 84,000 Wisconsinites in need, or if they swallow their pride, and actually do the right thing for their state. We are watching.

P.S. This is far from the only waste of taxpayer dollars associated with GOP schemes on Medicaid. I didn't even mention Sen. Alberta Darling's plans to bail out hospitals by throwing tens of millions of state dollars to make up the difference in payments resulting from serving the uninsured and other uncompensated costs. Not only is this corporate welfare using our tax dollars, these costs would also be drastically reduced if you simply took the Medicaid expansion. It's the type of move that screams "UNFIT FOR OFFICE!"


  1. > "Work Makes You Free" plan

    Wisconsin is thus less free than when he started then, going from 63.5% of the adult civilian noninstitutional population being employed to 63.3% in April.

    But for the general gist of your post, this is clearly Walker taking the option to hurt as all Wisconsinites as much as possible: whether via lack of Medicaid coverage, or in the higher insurance premiums the insured will have to pay, or the jobs we won't see or making up the loss of those jobs' tax revenues by paying higher taxes/having fewer services than we otherwise would. There simply is no upside to refusing the Medicaid expansion.

  2. And on that note, Geoff, here's the J-S with another report mentioning that when people have health coverage, they are less likely to need to be in the hospital for care. Classic case of "an ounce of prevention is a pound of cure."

    But I'm also convinced part of Walker/ WisGOP's real goal is to hamstring the next guv from digging the state out of the hole that they're causing. That's the only way Walker's policy makes any sense.

    1. That does line up with the huge borrowing and fire sale of public assets in the next budget: after June 2015 we're in need of miraculous monies to make the state budget work, a budget that Walker will have to take national responsibility for if it is his intention to run in both 2014 and 2016.

      We won't know for sure whether he's running in 2014 or not until June 2nd next year with the GAB's filing deadline, but there are three possibilities:

      (a) Walker loses in 2014 and his political career is over.
      (b) Walker wins in 2014 and the 2016 GOP candidate debates go:
      Walker: "And I balanced Wisconsin's budget..."
      Christie: "So how come your debt is skyrocketing?"
      Walker: "Oh dear, I hadn't thought of that".
      (c) Walker doesn't run in 2014 and the 2016 GOP candidate debates go:
      Walker: "And I balanced Wisconsin's budget..."
      Christie: "So how come Wisconsin's debt is skyrocketing?"
      Walker: "Because the new Wisconsin Governor is undoing all my good work. That's a good excuse, right?"

      Running in 2014 doesn't have much upside for Walker.