Medicaid Power Shift Would Minimize Public Input and Legislative Role

The budget documents released last Tuesday talk in broad terms about how the Walker Administration wants to change BadgerCare Plus and Medicaid to cut costs by about $500 million in the 2011-13 biennium; however, those summary documents provide no specifics. But if someone were to study the 1,345-page bill, surely they would find the details of the Governor’s plans, right? Actually, no; the biennial budget bill doesn’t say a thing about how coverage of children, parents, childless adults or pregnant women would be changed.

The lack of detail is extremely disappointing but it shouldn’t be surprising to anyone who has reviewed the Medicaid-related potions of the “budget repair” bill introduced by the Governor in mid-February. That bill, which was being fast-tracked through the Senate, contains an unprecedented shift in the power to rewrite the law from our elected lawmakers to an unelected administrator in the Department of Health Services (DHS). The Medicaid-related policies that have been established in the statute books over the last 15 years – including such things as income eligibility limits, other eligibility requirements, premiums, co-payments, and services covered – could all be rewritten by the DHS Secretary behind closed doors.

This blog post examines the sweeping and potentially unconstitutional shift of power, and it reads between the lines of the budget repair bill to surmise what the ultimate effect could be for some of the 775,000 Wisconsinites enrolled in BadgerCare Plus.

When I describe the vast shift in power in the bill, I sometimes feel like I’ll be dismissed as an overzealous advocate engaged in hyperbole. So rather than describe the bill in my own words, let me cite what the nonpartisan staff in the Legislative Fiscal Bureau (LFB) and Legislative Reference Bureau (LRB) have written about the bill. The Fiscal Bureau put the Medicaid-related changes on a list of non-fiscal policy measures, stating that they would “remove the entire Legislature from determining substantial elements of the medical assistance program.”

The attorney in the Legislative Reference Bureau who drafted the Medicaid portions of the bill said in her drafter’s note that this legislation “would allow DHS to change any Medical Assistance law, for any reason, at any time, and potentially without notice or public hearing.”

You can read more about the Medicaid-related changes in the bill in a blog post written by my co-worker Bob Jacobson for the Center for Children and Families at Georgetown University.  For a longer and wonkier description of the bill, see my Feb.17 analysis, which describes the changes in Medicaid policy setting and includes an appendix summarizing the maintenance of effort (MOE) requirements in federal law.

The budget repair bill directs DHS to seek waivers to allow the state to adopt BadgerCare and Medicaid policies that conflict with federal law. If the state got a broad waiver from the MOE requirements, it appears that the DHS Secretary would probably use his grant of unfettered authority to make the following changes in BadgerCare Plus:

• significantly increasing premiums and co-pays, and applying premiums to lower income families, which could price coverage out of the reach of some families;
• reducing income eligibility;
• prohibiting coverage of people who have an offer of employer coverage, regardless of whether they can afford that coverage;
• reducing services covered; and
• denying services to people who can’t afford the increased co-pays.

If the state does not receive a waiver of MOE requirements by December 31 of this year, the bill requires the BadgerCare Plus income eligibility limits to be dropped in July 2012 to the full extent currently allowed in federal law. That would allow eligibility for parents and adults without dependent children to be reduced to 133 percent of the federal poverty level, from the current 200 percent level. Based on current enrollment levels, the Fiscal Bureau says that about 63,000 parents and 7,000 childless adults would lose their BadgerCare coverage.

The figures cited by the LFB are just the effect on adult coverage of a decrease to 133% of the poverty level. Many children and other adults could be adversely affected and might lose coverage because of other changes authorized in the bill, such as increased premiums and cost-sharing, and tougher restrictions on eligibility for people who have access to employer sponsored coverage.

To follow this issue, see the website of the Save BadgerCare Coalition.

Jon Peacock