A Better Way to Balance the Medicaid Budget

One in five people in Wisconsin now depend on Medicaid. Under a new administration proposal, health care for many of these people could be in danger. 

Hard times forced many people to turn to the state for health care. While most of state government saw deep cuts in the last budget, the health budget actually increased.

In an odd form of ‘the state giveth and the state taketh away’ the budget also required the Department of Health (DHS) to give back about 16% of this increase in new state money.

Under the guise of these budget cuts, state officials are seeking permission from the federal government to make big changes in health programs. If the feds fail to act by a quick state-imposed deadline, officials say 53,000 people will lose health care; another 200,000 will pay much more for less coverage.

Many constituents call me concerned about their family’s health care. I tell them the full Legislature will not vote on these big changes. Act 10 gave DHS unprecedented power to make changes in who gets what in Medicaid. The only elected officials to approve the plan are members of the legislature’s finance committee.

Recently, I reviewed the details of proposed cuts presented to this committee.

Some cuts were not real - but accounting tricks, double counting and agency requests denied by the governor’s budget were counted as cuts. These I subtracted in my analysis. Then I looked where the real cuts fell.

First the good news: if you hold a state contract, you are safe. Near as I could tell, none of the half a billion (in all funds) is cut from the millions DHS pays to contractors. Nor is the $57 million budget increase just given to these contractors.

Now the bad news: if you don’t currently have Medicaid and are hoping to get on it, things don’t look good. Under the administration proposal, about 10,000 elderly and disabled will be unable to get Family Care. About 6,500 young people will lose BadgerCare. Of those who keep BadgerCare, about 215,000 people will see fewer benefits and higher out-of-pocket costs. Also, nearly 100,000 eligible people waiting to get on ‘BadgerCare Core’ won’t see any assistance at all.

The budget axe falls hardest on the necks of those frail elderly and disabled who need but can’t get into Family Care. A cap on enrollment accounts for nearly forty percent of the total adjusted cuts. If permission is not granted to make these cuts, the axe falls on 53,000 families who will lose their health insurance.

This is a false choice. We don’t need to pit the elderly against families with children.

Instead, we must address the underlying causes of rising health costs. Let’s change the way doctors and hospitals are paid to encourage better performance. Paying for value is a part of the administration proposal but barely; the cuts contribute a mere two percent. Nothing in the proposal addresses medical costs associated with errors, paperwork, duplication or the poor use of care.

We must also address why BadgerCare costs are so high. For example, almost half of all babies born in Wisconsin are paid for by Medicaid. Yet a tiny portion of the proposal deals with coordinating care for moms-to-be. With 1-in-4 of all BadgerCare hospital dollars going to new-baby costs, we should put healthy births on the very top of the list.

Medicaid is a lifeline for many families. Before DHS dumps families, we need a low cost alternative for health insurance. My recently introduced Senate Bill 273 creates a health exchange for small businesses and individuals that provides such an alternative. State leaders should move quickly to adopt this proposal.

Kicking people off health care has real consequences to real people who live and work in our communities.  People who lose health insurance delay care; they go to the hospital much sicker than if they had insurance. Babies are born sick. Families hurt. Elders suffer. We all pay more because some waited too long.

With one in five Wisconsinites served by Medicaid - what happens in Medicaid affects us all. Let’s be wise, prudent and compassionate in our decisions.