Thursday, January 3, 2019

Current savings doesn't take the need to expand Medicaid off the table

As we head into the inauguration of Tony Evers, a central issue will be health care and what to do with Medicaid. Medical Assistance is the second-largest expenditure of state funds behind aid to K-12 schools, with benefits projected to cost $6.1 billion in state tax dollars the current 2017-19 budget.

On that front, there was good news for the state’s finances, as Medicaid is now projected to come in nearly $213 million below the budgeted amount, improving the breathing room for the last 6 months of this biennium.
The projection has improved as a result of updated assumptions for CY 19 capitated payments for members enrolled in managed care programs, plus additional months of trend data for fee-for-service utilization and for enrollment. The Department estimates that, overall, actuarially-set rates for HMOs serving the BadgerCare Plus and SSI Managed Care populations will decline from CY18 to CY19 based on enrollees’ service utilization trends. Savings from these lower rates will be partially offset by higher Family Care MCO rates. In addition, FY19 claims for federally qualified health centers through November [2018] have been significantly lower than what was assumed in the September estimate. Prescription drug expenditures have also been substantially lower. Finally, enrollment is trending lower than previous projections.
Now, whether enrollment is trending lower because of an improving economy or because the Wisconsin GOP has thrown up more barriers to prevent individuals from getting benefits – I’ll leave that up to you to decide. But it certainly shows a leveling off of Wisconsin taxpayer costs after an increase of $850 million over the previous 5 years.

Related to the lower enrollments and costs, I wanted to test whether these individuals are simply being pushed out of Medicaid because their incomes got over the poverty line (which is the cutoff for Badger Care). So I looked at Wisconsin’s sign-up figures for the recently-completed enrollment period for the Obamacare exchanges, and compared it to the ones in late 2017 and late 2016.

The trend of enrollment in ACA plans also seems to be slowly declining in Wisconsin, so perhaps more people are finding insurance through their employers…or more are choosing to go uninsured.

ACA Exchange sign-ups, Wisconsin
Late 2016 242,063
Late 2017 225,435
Late 2018 206,970

What’s happening with the state’s amount of uninsured has been a mixed bag, as Gallup indicated that Wisconsin had one of the largest increases in its rate of uninsured in the nation in 2017, while the US Census Bureau said in September that there was basically no change in Wisconsin’s uninsured rate from 2016 to 2017 (which is the last year measured).

Putting it all together, I’d cautiously say that this data indicates that Wisconsin is in a good spot on its health care spending and insured situation as 2019 begins. But that doesn’t mean it can’t be better. Records from 2016 and 2017 show that over ¼ of Wisconsinites getting a plan on the ACA exchanges are in the 100-150% of poverty range of income. That means most of those people could likely be covered by the expanded Medicaid provisions in the ACA, as that covers individuals and families living at 138% of poverty or below.

In addition to the savings that the state would recover by the Medicaid expansion for the costs of all Wisconsinites that are below the poverty line, expanded Medicaid would remove the state’s costs of certain treatments that BadgerCare does cover for people whose incomes are above the poverty line. This includes pregnant women and children, working poor who can buy into Medicaid, and people in need of premium assistance for Medicare. Expanded Medicaid would also lower and/or remove up-front premiums for those lowest income Wisconsinites that get their insurance through the exchanges, which is likely to help their financial situation.

Interestingly, the lower costs of Medicaid for 2017-19 now make it more likely that there will be a cushion carried over into Evers’ first budget for 2019-21. Evers reaffirmed this week that he plans to include Medicaid expansion and its estimated $200 million a year in savings into that budget, which should allow for plenty of funding for other needs such as K-12 education and roads.

Another option would be to save the money available from the temporarily lower spending in Medicaid to keep things running smoothly in case revenues and jobs in America start to decline. If that occurs, then those Medicaid enrollments and costs are likely to rise, and having federal money to cover those expenses will give even more savings to Wisconsin taxpayers.

Those seem like much better options than having another round of corporate tax giveaways that you know the WisGOP Legislature will try to push through, because WisGOP has no other strategy on fiscal policy and job creation besides kickbacks to their donors. And I am sure they will double down on that foolishness even though 8 years of that strategy landed us in the bottom half of job growth in the country and in our region.

They won't stop digging.

Helping Wisconsinites stay healthy and financially stable seems like the better strategy to me, because the way things are going, things are going to get economically unstable for many in this country pretty soon (DOW down 660 again today, and the worst start to a year in nearly 2 decades, by the way). We can’t afford to fall further behind after the Age of Fitzwalkerstan already has set us back, and I’d expect Tony Evers’ health care policies to have that theme of security as a main focus. It sure will beat being beholden to a Koched-up ideology that covered fewer people at a higher cost.

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