Healthcare Business News

Wisconsin's controversial Medicaid plan gets federal nod

By Virgil Dickson
Posted: January 10, 2014 - 8:00 am ET

Wisconsin Gov. Scott Walker won federal approval Thursday to expand Medicaid coverage to as many as 83,000 low-income childless adults while ending coverage for about 77,000 childless adults who earn between 100% to 133% of the federal poverty level.

Those taken off the state's Medicaid program, known as BadgerCare, will be directed to the new health insurance marketplace created by the Patient Protection and Affordable Care Act.

However, unlike his Republican peers in states like Arkansas that have recently sought waivers to expand Medicaid eligibility, Walker declined to tailor the scope of the plan to satisfy the Medicaid provisions of the healthcare reform law. That means the state will have dramatically less federal funding for credits that will help those booted off BadgerCare afford insurance in the marketplace.

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Without financial assistance, many of those just over the poverty line “will not in fact be able to afford that coverage and will therefore be left uninsured,” Tom Oliver, professor of medicine and public health at the University of Wisconsin, said.

Experts say that Walker's refusal to take more federal money was his attempt to appease residents and Democratic lawmakers who wanted expanded Medicaid coverage and also please Republicans around the country who argue the Medicaid expansion is a burden on taxpayers and oppose the Affordable Care Act in general.

“He's created an expensive complicated mess by not accepting federal Medicaid expansion dollars,” said Bob Peterson, executive director of ABC for Health, a public interest law firm in the state. “Scott Walker is motivated by political ambition rather than the need to truly help low income Wisconsinites get health care coverage.”

The state also got permission to continue to charge a premium to parents in the state's transitional Medicaid program. These are people who are working their way up financially from welfare into the workforce, and have been given a grace period of 12 months to keep their Medicaid coverage.

Since 2012, Wisconsin has been charging premiums to those in the transitional program who earn more than 133% of the poverty level. The state now has permission to charge premiums for those who earn as little as 100% of the poverty level.

Failure to pay the premiums means the loss of coverage for three months. However, the CMS put some safeguards in place to lessen the blow of the new financial requirement. Premiums won't apply to the lowest income enrollees until they have been receiving the assistance for six months, and the premiums can account for no more than 2% of the beneficiaries' income.

There is also a 30-day grace period before parents can be removed from the assistance program for failing to pay a premium, and they can re-enroll at any time during that three-month suspension if they pay the owed premiums. After the three month suspension, they can re-enroll for the remainder of the 12 months even if they haven't paid the past-due premiums.

While advocates are disappointed with this part of the waiver, “it's substantially better” than what the state had initially proposed, said Jon Peacock, research director of the Wisconsin Council on Children & Families. The state original plan called for removing residents from the transitional program for the remainder of their 12 months of eligibility if they didn't pay the premium.

Follow Virgil Dickson on Twitter: @MHvdickson

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