Reform Update: Wisconsin proceeds with plan to trim Medicaid rolls

More than 56,000 low-income households in Wisconsin are expected to receive letters this week informing them that they will stop receiving Medicaid coverage at the end of the year. They will be told they can apply for federally subsidized private coverage in the state health insurance exchange, though such coverage likely will carry significantly higher cost sharing.

The move is part of a plan proposed by Republican Gov. Scott Walker and approved in the state's Republican-led Legislature earlier this year to place new restrictions on the state's Medicaid program, called BadgerCare. The plan will result in an estimated 92,000 residents losing Medicaid coverage after Dec. 31.

Under the state's previous model, adults earning up to 200% of the federal poverty level were eligible to receive Medicaid. Walker's plan would continue to provide Medicaid coverage for adults earning less than 100% of the poverty level and for children in households earning less than 300% of poverty. The federal government has been paying about 60% of the cost of Medicaid for Wisconsin residents.

Wisconsin is one 21 states that rejected expanding their Medicaid program under the Patient Protection and Affordable Care Act, which would have covered adults earning up to 138% of the poverty level; the federal government would have paid 100% of the costs for covering the expansion population for the first three years, and 90% after that.

According to the letter, final notices will be sent in December that will identify exactly who within a given household is slated to be cut from the program. Those losing Medicaid benefits would have until Dec. 15 to apply for uninterrupted coverage starting Jan. 1 through the state health insurance exchange.

Critics say the timing does not allow enough time for letter recipients to find coverage before the Dec. 31 deadline, after which those who are without coverage are subject to possible fines under ACA.

In a letter to Walker on Monday, U.S. Sen. Tammy Baldwin (D-Wis.) said it was up to the Walker administration to ensure that Wisconsin residents who lose Medicaid coverage under the governor's plan are enrolled in subsidized exchange coverage.

“As you are well aware, Wisconsin families that do not enroll in Marketplace coverage by December 15, 2013, will lose health insurance coverage beginning on January 1, 2014,” Baldwin wrote. “These families cannot afford to pay for any shortcomings you are creating in not seamlessly moving these Wisconsinites from BadgerCare to the new Marketplace.”

Moving forward on a plan that would privatize care for Medicaid recipients, Florida has awarded contracts to insurers to provide managed care for the state's low-income residents.

The contract winners include Staywell Health Plan, a subsidiary of WellCare Health Plans, and Centene Corp.'s Sunshine State Health Plan. They have been awarded contracts to provide managed-care services as part of the state's Managed Medical Assistance program.

Under the agreement, Staywell would provide services in seven of the state's 11 regions while Sunshine would serve nine regions. Sunshine currently provides managed-care services under the Long Term Care portion of Florida's Statewide Medicaid Managed Care program, serving 10 regions.

“We are pleased to have received the state's notification of intent to award Sunshine Health 9 out of 11 regions,” said Robert Hitchcock, Centene executive vice president for health plans. “This intended award demonstrates Sunshine Health's proven record of providing access to high-quality, comprehensive healthcare at lower costs to the state.”

Enrollment is expected to begin next spring and is scheduled to be completed by October 2014. According to the state's Agency for Health Care Administration, 10 insurers have been selected to provide general managed care throughout the state, while five companies have been awarded contracts to provide specialized plans, including ones focused on HIV/AIDS, child welfare and foster care, severe mental illness, and adults with chronic medical conditions.

ACHA Secretary Liz Dudek said her agency “has confidence these plans will be able to provide high quality care through robust networks, a variety of extra benefits, and increased flexibility in meeting the unique healthcare needs of each recipient they serve.”

Florida has been at the center of political wrangling that has continued over the implementation of the Patient Protection an Affordable Care Act.

The Republican-controlled state legislature rejected federal funding to expand its Medicaid program to adults earning up to 138% of the federal poverty level, despite calls from Republican Gov. Rick Scott to approve the expansion. The legislature also rejected proposals to establish a state-run health insurances exchange, prompting HHS Secretary Kathleen Sebelius to visit the state several times in recent months to oversee the implementation of Florida's federally run exchange.

Follow Steven Ross Johnson on Twitter: @MHSjohnson