Wednesday, November 6, 2013

The Budget Bill’s Failed Failsafe for Avoiding an Increase in the Uninsured

Despite Assurances, Bill Fails to Delay End of BadgerCare Coverage before an Effective Insurance Exchange is in Place

Should Wisconsin drop about 90,000 people from BadgerCare on January 1, even if most of them will not have been able to sign up for insurance through the new Marketplace by then? During the budget process, there seemed to be broad agreement that the proposed cut in BadgerCare eligibility shouldn’t and wouldn’t take effect until the large group of people losing their BadgerCare coverage could get insurance through a health insurance Marketplace that is running smoothly.  Unfortunately, the budget bill doesn’t deliver on the promise to keep them from becoming uninsured.

Throughout the budget deliberations, state officials provided assurances that the reduction in eligibility of adults in BadgerCare to the poverty level was contingent upon having an effective alternative in place, in the form of an operational Marketplace. However, because the budget bill didn’t explicitly address that concern, the Joint Finance Committee added an amendment to the bill to allay fears about cutting people off BadgerCare before they could sign up through the federal Marketplace.

In a column in the Journal Sentinel just a week ago, DHS Secretary Kitty Rhoades reiterated the intent to hinge the cut in BadgerCare eligibility to having an operational Marketplace working by now:
Obviously, concerns were raised over whether or not the federal government would be ready to operate the exchange by Oct. 1 — which is why moving forward with the Wisconsin model was tied to the exchanges being operational.
Unfortunately, the failsafe amendment that the Finance Committee added to the budget fails to deliver the promised protection. What that amendment appears to say is that the state won’t cut in half the income ceiling for adults in BadgerCare until April 1, 2014, if the federal HHS Secretary hasn’t certified by October 15 that there’s a functional Marketplace for Wisconsin. But as it turns out, the fact that there has been no such certification hasn’t triggered any protection for the 90,000 people who are at considerable risk of being uninsured in January.

The problem with the JFC amendment to the budget is that there’s a caveat that wasn’t generally recognized during the budget process. The requirement that the cut in eligibility be delayed by 90 days if the new Marketplace hasn’t been certified by October 15 adds a statement saying that protection kicks in only if such certification is required under federal law.  Oops! As it turns out, there is no such requirement, which appears to negate the intent of the JFC amendment.

I don’t want to say unequivocally that the Governor doesn’t have the authority to delay the effective date of the BadgerCare change. Perhaps somewhere else in his broad executive branch powers is a clause that would allow him to apply common sense in this instance. Alternatively, perhaps federal officials at HHS have a way of delaying approval of the state changes. Either of those scenarios would help explain why Secretary Rhoades said only a week ago that the BadgerCare change “was tied to the exchanges being operational.”

Thus far, the Governor has shown little inclination to delay eliminating about 90,000 people from BadgerCare. Late last week, Mayor Barrett sent a letter to the Governor urging him to delay the eligibility reduction for a few months. In an interview with Wisconsin Public Radio (WPR), the Governor quickly rejected that suggestion – at least for now – but he didn’t completely dismiss it.  According to that story, the Governor left the door open a little: “Walker says if the federal government falters, the state would re-assess the BadgerCare changes at the end of this month.”

The Governor and other state officials have asserted on numerous occasions this year that his compromise plan will nearly cut in half our state’s uninsured rate, and we commend him for that. However, if the state cuts off BadgerCare in January before the people losing coverage have an adequate opportunity to sign up for coverage through the Marketplace, the state will start 2014 moving backwards.

Even if the online enrollment system for the Marketplace is working well in a couple of weeks, that doesn’t leave enough time to get so many people the assistance they need to sign up for coverage and pay the monthly premium due by December 15 (to avoid becoming uninsured in January). Sticking to that timetable would create a logjam that will also impede efforts to get coverage for the 25,000 people losing their state high-risk coverage (HIRSP) by the end of the year, as well as for a large portion of the roughly 500,000 people who are already uninsured.

That logjam could easily be avoided by delaying the January 1 reduction in BadgerCare eligibility.  Whether that can still be done administratively or has to be done legislatively is unclear to me.

Jon Peacock

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