Knee-jerk political opposition to any changes in the status quo are making it difficult for states to continue to pay for federal entitlements that threaten to bankrupt them – and the nation.
Case in point: Wisconsin, which has requested a waiver from the Centers for Medicare and Medicaid Services that would allow it to change its Medicaid eligibility requirements. Gov. Scott Walker and the Republican legislature are under attack for allegedly trying to “hurt the poor” even though the requested waiver would impose the same eligibility requirements that Obamacare will impose nationwide in 2014.
“We shaped our reforms around the Patient Protection and Affordable Care Act using the same income levels,” Wisconsin Health Services Secretary Dennis Smith told The Washington Examiner. “If they’re good enough for Obamacare, they should be good enough for Medicaid. If people won’t pay our premium, they won’t pay the Obamacare premium either.”
Wisconsin has already had to divert $1.2 billion from new revenue and other programs to shore up BadgerCare, as Wisconsin’s Medicaid program is called.
One of the federal strings attached to higher Medicaid “match rates” enjoyed by the states for the past two years was a provision that they could not lower or change eligibility requirements. The expanded federal funding expired July 1st, but the eligibility rule did not.
On Nov. 10th, the state legislature’s Joint Finance Committee voted to cut $554 million from BadgerCare, affecting some 65,000 people.
The program, which was originally intended to provide a safety net for the poor, sick and disabled, now covers 1.1 million people – or about 20 percent of the state’s entire population. Under Walker’s Democratic predecessor, Medicaid rolls ballooned nearly 10 times faster than Wisconsin’s population growth. The financial burden has become unsustainable.
Rather than just dumping 53,000 individuals with incomes above 133 percent of the Federal Poverty Line (higher than federal guidelines require) from BadgerCare, Smith’s creative alternative would allow Wisconsin to tighten up its eligibility requirements and drop only those who:
- Refuse to pay a 5 percent premium towards the cost of their own care if their incomes are 150 percent over the federal poverty level;
- Already have access to affordable coverage through their employer;
- Fail to prove they are residents of Wisconsin.
“Our proposals represent modest reforms to a program that is facing even greater uncertainty over the next several years,” Smith told the state Finance Committee.
“Rather than denying health coverage to an entire population without regard to their particular circumstances, we are instead proposing …fair, focused measures that will help reform Medicaid to create a fiscally sustainable program in the future.”
Smith told The Examiner that a family of three earning $27,795 per year now pays just $10 per month for BadgerCare. But state employees earning the same amount with the same size family pay more than $200 per month, while private sector employees in identical circumstances pay more than $300 for coverage monthly.
If the Wisconsin waiver is approved, BadgerCare recipients would have to pay $116 per month – still much less than state employees or private sector workers.
“We believe that as a matter of fairness that families enrolled in Medicaid, who have income comparable to their neighbors, should be expected to contribute a reasonable amount to the cost of their care and receive similar benefits as the typical private plan,” Smith said. “We have faced up to these challenges rather than leave them for someone else.”
If CMS does not approve Wisconsin’s waiver request, the state budget passed by the Republican-controlled legislature and signed by Gov. Walker will lower Medicaid eligibility requirements from the current 200 percent of FPL down to 133 percent – the lowest level mandated by federal law (and lower than the waiver cutoff). This would force about 53,000 individuals completely off BadgerCare when the statutory trigger goes into effect on Dec. 31st.
“The Obama administration approved an indiscriminant freeze in Medicaid enrollment by the previous Democratic governor when BadgerCare hit the budget neutrality cap,” Smith said. “At least we give people a choice.”
So the ball is now in the Obama administration’s court. “This is a test run of Obamacare,” Smith added. “Don’t they want to know what the impact will be on this population?”
