Another Bogus Attack on Wisconsin Medicaid
The Wisconsin Legislative Fiscal Bureau analysis estimates the state is losing about $100 million a year by not expanding its Medicaid eligibility as much as allowed under the Patient Protection and Affordable Care Act (ACA). This mudslinging by Wisconsin Governor Scott Walker’s gubernatorial challenger is disingenuous and ignores the fact that Wisconsin made a better choice by allowing many of its low-income uninsured to access private coverage with federal subsidies.
Over the past several years state legislators have grappled with the pros and cons of Medicaid expansion under the ACA. The carrot dangled in front of state legislators is financial; states that agree to expand Medicaid eligibility to 138 percent of the federal poverty level (FPL) can expect the federal government to reimburse states for most of the cost for newly eligible enrollees. Critics of Medicaid expansion counter that the savings are front-loaded in the early years, whereas state costs begin to rise in later years when it’s too late for states to back out. Whereas the federal government will pay 100 percent of the costs through 2016, the feds begin ratcheting the matching rate down to 90% by 2019.
Wisconsin had already expanded its Medicaid eligibility well beyond levels advanced by the ACA prior to its passage. Most uninsured Wisconsin residents earning up to 200 percent FPL were already eligible for coverage under the state Medicaid program, known as BadgerCare. Uninsured children and pregnant mothers-to-be were eligible at even higher-income levels. However, when state funds began to run low, enrollment was capped — making many of those eligible unable to enroll.
In response to a Supreme Court ruling that allowed states more flexibility, Wisconsin made some innovative changes to its Medicaid program that serve as a model for other states. Rather than expand its Medicaid program to cover all legal residents earning up to 138 percent of poverty, Wisconsin took a different route. Wisconsin’s BadgerCare program was reformed to mostly cover those earning at or below the poverty level.
This strategy allowed many uninsured individuals who would otherwise have qualified for Medicaid to instead quality for subsidized private coverage. Provisions in the ACA allows uninsured individuals earning 100 percent to 400 percent of FPL to get subsidized, private coverage in the Health Insurance Exchange. For those earning just over the poverty level the subsidies are very generous — premiums capped at no more than 2 percent to 3 percent of income.
As part of the process Wisconsin scaled back eligibility for adults earning more than 100 percent of the FPL — removing an estimated 63,000 people from its Medicaid program. Wisconsin then uncapped enrollment for its Medicaid program to cover about childless adults earning up to 100 percent of FPL. About 97,500 individuals added to the Medicaid rolls. Most of these individual were previously eligible but unable to enroll due to the cap on enrollment. Wisconsin’s novel experiment resulted in roughly 35,000 addition Medicaid enrollees, rather than potentially 100,000 additional enrollees under full expansion. Not all of those dropped from the rolls have bothered to sign up for exchange coverage — which may explain the additional costs. But that’s certainly no reason to expand Medicaid further.
Why Not Expand Medicaid? On paper, Medicaid coverage appears far better than what most Americans enjoy — with lower cost-sharing and unlimited benefits. However, Medicaid enrollees fare worse than similar patients with private insurance. Medicaid enrollees tend to be in poorer health and face barriers to care.However, states that choose incremental (that is, partial) expansion will receive their historic matching rate for new enrollees. The federal Medical Assistance Percentage (FMAP) in Wisconsin is 59 percent. An additional advantage (beside expanding private coverage) of not expanding Medicaid or only partially expanding the program is the flexibility that many experts believe will be available to states that apply for waivers in 2017.
Access to care for Wisconsin’s new BadgerCare enrollees would likely get much worse if more people are added to the Medicaid rolls and new Medicaid patients flooded doctors with requests for appointments. Low reimbursement rates are one of several factors contributing to the shortage of physicians willing to treat Medicaid enrollees.On average, Wisconsin pays physicians participating in the fee-for-service Medicaid program only half as much as private insurers reimburse for the same service. A Medicaid card isn’t the same as being able to see a doctor when you need to. Low provider reimbursement rates make it more difficult for Medicaid enrollees to find physicians willing to treat them, limiting their access to care.
I’d say that BadgerCare is a pretty good deal for both the state and for its residents. Its a fiscally responsible alternative to taking government cash for expand Medicaid.
This is a simple concept I’ve advised numerous states to do, including Florida, Virginia, Michigan, Wisconsin, and elsewhere.
Basically, the Feds promise to pay most (but not all) of the cost for Medicaid expansion. State who don’t fully expand Medicaid can still get federal matching funds for partial expansions, just not quite as much. The only thing states are giving up is a higher FMAP for the marginal enrollees. What he state gains by partial expansion is the chance to expand private coverage to those living above the poverty line.
This is how it works: some of the uninsured living at or above poverty (who would have been Medicaid eligible under an expanded Medicaid program) will instead qualify for highly subsidized private coverage. The state would get less federal money for new Medicaid enrollees just below poverty, but more federal money for exchange enrollees living just above poverty. In the process, the state would have more people in private coverage and wouldn’t have to contend with a bloated Medicaid program that cannot be controlled.
This sounds like a win-win to me. But, then again, champions of Medicaid don’t understand why other people doesn’t want Medicaid to ultimately expand until it crowds out all private coverage. I suspect many proponents of Medicaid expansion favor a two-program government monopoly consisting of Medicaid/Medicare
I think Medicaid should be used just for exactly its demographic, the poor making at or under the poverty limit. For those making over the limit, they get a nice chunk of a subsidy to account for a lot of the premium cost.
Today 66 million people are enrolled in Medicaid, while about 50 million are enrolled in Medicare. Neither program reimburses doctors well. More than 30 million are uninsured, so half the population doesn’t have coverage that doctors need to make ends meet.
An issue that I believe many people don’t take into consideration is the lack of physicians willing to treat Medicaid patients. Most of the physicians I know feel it’s their charitable obligation to treat some Medicaid patients — even if those patients aren’t profitable customers.
But, doctors report feeling taken advantage of. What was once a small Medicaid population of poor people has grown into a much larger population of people who are moderate-income rather than poor. It makes doctors feel good helping the occasional poor person. But it overwhelms them when every other caller is a Medicaid enrollee — especially if the patient doesn’t seem to be poor.
About 10 years ago I talked to a doctor (OB/GYN) who complained that too many pregnant mothers-to-be came to him saying they are too poor to pay his fees. Some fees Medicaid probably paid, others he had to write off as charity care. Then, on the day of the birth, all the relatives would arrive to support the mother. They’d bring all manner of video cameras (which now are cheap but weren’t back then), the men would wear ostrich skin cowboy boots, gold jewelry, they’d all drive up in highly customized pickup trucks, etc. At the end of the day the doctor drove home in his second-hand Honda. He definitely felt taken advantage of; both by Medicaid and by individuals who wanted charity care even though they afforded themselves luxuries far more expensive, and less important, than medical care.
I think we need to look deeper at Medicaid revenue to hospitals versus doctors. Doctors don’t see Medicaid patients, but hospitals lobby to increase Medicaid. Is it to fill the ERs?
Don’t try and use logic folks we are up against the Best Medicaid Expansion Salesmen(BMES) that money can buy. Rick Scott, Charley Crist and CEO of non-profit Florida Blue Cross Inc. All of these Medicaid salesmen suck. Their ring leader is CEO Patrick Geraghty a scum bag that get’s $900,000 a year but with bonuses makes 6.7 million a year! Devon you forgot to mention about all of Pat’s VALUE. Watch this 2 minute video and it will make you eyes bleed.
https://www.youtube.com/watch?v=4xA0Go15cCI
Thanks Devon, I will get this post to the people who need it.
“Watch this 2 minute video and it will make you eyes bleed.”
Ahh my eyes! My eyes!
Very eye opening youtube. Wonder if he supports reducing federal taxes as a method of keeping money in Florida. What does quality mean and why is an overpaid crony capitalist insurance executive involved in the quality determination process?