Tuesday, January 3, 2012

State Announces Medicaid Shortfall is $322 Million Less than Anticipated

Great News For BadgerCare, Funds Should Enable the State To Avoid Most of the Proposed Cuts

In a letter to the Joint Finance Committee, the Department of Health Services (DHS) revised estimates of a $554 million shortfall in this biennium’s Medicaid budget, down to $231.8 million all funds. This is great news for Wisconsin, especially in the midst of the debate over major eligibility, enrollment, and benefit changes (currently being reviewed at the federal level), which would result in tens of thousands losing their BadgerCare.

The changed projection comes after analyzing spending thus far in fiscal year 2012, and is lower due to several factors, including lower than expected enrollment, lower costs per enrollee, lower Medicare Part B premiums (which are paid by Wisconsin for dual enrollees), and a much lower ($18 million lower) drug rebate reimbursement to the federal government.

DHS was quick to point out that this projection represents a change of only 2% of the total program budget this biennium. However, the changes currently proposed by DHS to achieve the cost savings needed to fill the shortfall would adversely affect more than two-fifths of BadgerCare enrollees. The reduced shortfall provides the perfect opportunity for the Department to go back to the drawing board, with this money and the CHIPRA performance bonus funding, and move forward with solutions that create real cost savings for Medicaid and BadgerCare, rather than just cost-shifting.

Even if part of the savings are used to lift the cap on Family Care, as the state intends to do, the remainder and the federal bonus funding should allow the state to avoid all or most of the proposed changes to BadgerCare that would increase the number of uninsured Wisconsinites.

For more on this announcement, see Jason Stein’s article in the Journal Sentinel here.

Sara Eskrich

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