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Wednesday, May 2, 2012

Walker's Budget Deficit Enables Deep BadgerCare Cuts

Premiums up, 17,000 priced out, waiting list remains

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Although Gov. Scott Walker is boasting on the campaign trail that he has balanced the state budget, the federal government has certified his statement that the state will have a budget deficit by July 2013, which will allow Walker to hike BadgerCare premiums. An estimated 17,000 people will leave the program because they will no longer be able to afford it.

Beginning in July, about 33,000 of those remaining on BadgerCare will see their premiums increase as much as 10 times what they are currently paying.

The Walker administration is still pursuing federal permission to raise co-pays and decrease covered health care services utilized by an additional 300,000 individuals.

The changes could have been even more significant, but the federal Centers for Medicare and Medicaid Services (CMS) determined that roughly only a quarter of the changes the Walker administration had sought were legal under the federal Affordable Care Act (ACA).

For example, Walker's appointed secretary of Health Services, Dennis Smith, had requested changes that would have forced 65,000 people, including 29,000 children, from the program.

But CMS would not allow Walker and Smith to kick children off of BadgerCare.

Still, Smith spun his efforts to downsize the BadgerCare program as a victory.

"These changes aim to preserve the core, safety-net functions of the program for low-income individuals and are necessary in order to keep the Medicaid program sustainable," Smith said in a statement.

BadgerCare supporters, on the other hand, don't see any upside for Walker's attempt to dismantle the popular program, in which 1.2 million Wisconsinites are enrolled. Ironically, this program was the creation of a Republican governor.

"Even with the permission they got to make changes, they're still intent on kicking 17,000 people off of BadgerCare," said state Rep. Jon Richards (D-Milwaukee).

In February, Richards and state Sen. Jon Erpenbach (D-Middleton) had introduced the BadgerCare Protection Act, which would have repealed a $40 million corporate tax break enacted by Walker and the Republican-led Legislature, allowing some of those funds to be used to shore up the BadgerCare program. 

Supreme Court Ruling Could Trigger Deeper Cuts

Walker is making these changes to BadgerCare because of a provision in the Affordable Care Act that allows states with a projected budget deficit to make some changes to their Medicaid program, as long as the state still provides health coverage to their hardest-hit residents—what's known as the "maintenance of effort" requirement.

But that ACA protection is vulnerable.

The U.S. Supreme Court will decide its constitutionality this summer, and Walker has refused to implement its provisions in the state.

So if the court strikes down the ACA, Walker and Smith will likely be able to remove more people from BadgerCare, cut benefits and raise premiums.

"If the Supreme Court says that the ACA is not constitutional, the maintenance of effort requirement would no longer be a legal barrier for the Walker administration," Richards said. "It would give them more tools to kick people off of BadgerCare."

Robert Kraig, executive director of Citizen Action of Wisconsin, said that even if the ACA is upheld, BadgerCare coverage would be diminished. He said that children will likely lose their coverage if their parents lose their own.

"The Walker administration is banking on people leaving the program so they can balance their budget," Kraig said.

He noted that the low-income workers priced out of BadgerCare—especially those who work for small businesses—would have few affordable options in the private insurance market.

"They really have no other options," Kraig said. "BadgerCare is the only alternative for many people."

Overall, an analysis by Wisconsin Council on Children and Families Research Director Jon Peacock argues that Walker's changes are inconsistent with the ACA's goal of expanding access to affordable health insurance. For example, ACA requires states to expand Medicaid eligibility to those earning less than 133% of the poverty level and allows states to provide access to those who earn more than that floor level.

But Walker is "effectively making the floor a ceiling on eligibility for many adults," Peacock wrote.

Walker is "lemon picking" facets of the ACA to deny coverage, not expand it, Peacock concluded.

Walker Refuses to Enroll Eligible Adults

Walker's cuts aren't the only worrisome issue facing BadgerCare.

On Friday, Richards and state Rep. Tamara Grigsby (D-Milwaukee) asked CMS to investigate the Walker administration's refusal to fill a 22,000-person opening in the BadgerCare Plus Core plan.

In 2009, during the Doyle administration, the state had received federal permission to implement this plan, which covers childless adults. Up to 48,500 individuals were allowed to enroll.

However, Richards and Grigsby learned that only 26,800 people are participating in the program, leaving almost 22,000 spots available.

Yet 128,600 people are on the waiting list.

"The Walker administration is not allowing people to enroll in it," Richards said.

Stephanie Smiley, a spokeswoman for the state's Department of Health Services, said the 48,500 "spots" in the program was just an estimate of how many people the allocated funding would cover. Since the Core program was implemented, Smiley said, the department has found that the mix of federal and state funding only covers the expenses of the 26,800 people currently enrolled. The state would have to cover all of the expenses of anyone else who would be enrolled in that program, she said.