Many individuals and families  across Wisconsin are working and contributing to our economy while receiving poverty level (or just over poverty level) wages. We all know people who have been affected by the recession, who are struggling to make ends meet and making sacrifices in their lives.

When it comes to health care, they cannot afford insurance and are either denied service because of that fact or forced to use emergency rooms and high-priced critical care clinics for medical care.

The safety nets for these people are the Medicaid programs offered in Wisconsin, but as the economy has ravaged the nation and state, those programs are in jeopardy for some of the recipients.

Department of Health Services Secretary Dennis Smith told members of the Joint Finance Committee last Wednesday that every single penny of general purpose revenues (GPR = state income and property taxes) coming into the state over the next biennium would go to his department without changes and cuts, leaving no money for other state priorities such as education, corrections or transportation.

Walker has proposed a number of changes to the DHS, specifically targeting BadgerCare, FamilyCare and SeniorCare. He said these changes are necessary due to the $153 million budget deficit facing the department for the remainder of this fiscal year, the loss of $1.26 billion of one-time stimulus funds used by the DHS to maintain programing and the rising costs of health care.

Safety Nets

There are three major programs used by low-income participants across Wisconsin to gain access to health care. Over 1.6 million residents, or 28 percent of the total population, are enrolled in some type of government-provided health program.

The BadgerCare program has over 775,000 non-disabled parents, caregivers and children whose family incomes are above the Federal Poverty Line and equal or less than 300% of the FPL ($3,678 per month for a family of two). When the program was incorporated in 2008, its mission was to ensure access to health care by 98 percent of Wisconsin residents (that number includes those who have private or employer-provided coverage).

SeniorCare provides prescription drug coverage to all persons 65 or older who pay an enrollment fee and co-pays. It was created under a waiver from the federal government to supplement Medicare coverage. Only 5 states created SeniorCare-type programs, but only Wisconsin continues to offer it since the implementation of Medicare Part D prescription coverage. Approximately 90,000 of the state’s 780,000 elderly are enrolled in SeniorCare; of those participants 12,000 also draw Part D benefits.

FamilyCare was implemented in 1998 to provide cost-effective, comprehensive and flexible long-term care for the elderly and disabled persons while recognizing the patient’s independence, quality of life, need for interdependence and support. FamilyCare has two components – aging and disability resource centers (ADRCs), which provide a single entry point to obtain information about resources available in local communities; and managed care organizations (MSOs), which manage and service existing programs into one long-term care benefit developed for each patient’s needs, circumstances and preferences.

As of Feb. 1, 2011, there are 31,419 participants in FamilyCare in 48 counties.

All three programs are parts of Medicaid, which provides health care to certain eligible groups. DHS provides other services, including in-patient care at seven state institutions; the Women, Infants and Children nutrition program; maintenance of vital records and as the regulatory agency for 9,000 health care providers.

Secretary Dennis Smith and Deputy Sect. Kitty Rhoades. Screen shot courtesy WisconsinEye.

Walker’s plan

Walker has proposed holding the costs of administering Medicaid, BadgerCare, FamilyCare and SeniorCare to the actual expenses of the prior year. He wants all participants pay a “modest” co-pay and 5 percent premium for coverage. Plus, he would give control over finding cuts and savings to Smith and his staff with little legislative oversight.

That last item does not sit well with the Joint Finance Committee co-chairs, Sen. Alberta Darling (R-River Hills) and Rep. Robin Vos (R-Burlington).

“We’re giving some (oversight) up with this proposal,” Darling said at the JFC agency hearing. “Is that wise? The bottom line is we want to keep the legislative oversight.”

Other members of the JFC recalled when they gave up that oversight to the former head of the DHS and relied on her to find cost savings.

“That’s how we ended up with a $53 million deficit for this year,” Sen. Lena Taylor (D-Milwaukee) said.

Smith told the JFC that 5 percent of the participants in the Medicaid programs use 58 percent of the resources.

“I want to focus our resources on the highest cost, most needy recipients,” Smith said. “Our proposal is fair. Low-income working families receive a great value with BadgerCare. This would allow us to require a 5 percent payment toward the cost of the program. We think it is fair that families above 100% FPL provide for some of that cost.”

Smith is also open to the idea, suggested by Vos, that the working poor must enroll in their employer’s health plan if offered and pay the premium before enrolling in BadgerCare. Smith said the program should be considered a wrap-around program, or supplement for employer-provided insurance, not a sole provider.

The governor is seeking a waiver from the federal government on Medicaid eligibility requirements. He wants the latitude to remove people from programs if they are deemed income ineligible within 10 days, as opposed to the end of the month date. (For example, if someone is found ineligible on the 4th, they would loss benefits by the 14th, not the last day of the month, possibly saving 14-17 days of costs.)

However, if the feds do not grant the waiver by next January, Walker is proposing a big cut in the number of program participants beginning on July 1, 2012. He would enact a federal rule that allows states with budget deficits to remove all non-disabled adults with incomes over 133 percent of the federal poverty level ($14,500 for an individual/$19,564 for a family of two) from Medicaid programs.

Figures released by the Governor’s office estimate that would trim the rolls by 700,000 participants, or nearly half. Those most directly affected would be low-income, working families.

FamilyCare is currently undergoing an audit of its effectiveness and practices. The program has expanded from 5 counties in 2006 to 56 now, available to more than 80 percent of the state’s population. While the audit continues, Walker would freeze the expansion of FamilyCare to the remaining counties, but allow the enrollment numbers to remain the same. If someone left the FamilyCare program, another participant could receive services.

For SeniorCare participants, the state would require all recipients to enroll in Medicare Part D as a condition of eligibility. This would make SeniorCare the secondary payer for prescriptions, saving the state money on medication purchases.

Sen. Robert Jauch (D-Poplar) referred to the Medicare program as “Part Dumb,” saying it was written “by big pharma for big pharma.”

“We wrote SeniorCare to take care of our seniors,” he said. “Now seniors are scared they’ll lose it and have to deal with Part D and its Publisher’s Clearinghouse application. Why put people through that to save the state a few bucks?”

Family planning would take a hit under Walker’s proposal, as he would eliminate $1.9 million in funding for both female and male reproductive health in the 2011-13 budget. Taylor and Rep. Tamara Grigsby (D-Milwaukee) took Smith to task on the elimination of family planning funds, noting that these dollars don’t just fund contraception and pre-natal care. The loss of this money could eliminate other reproductive health screenings for uterine cancer, prostate cancer and STDs.

And the elimination of these funds could jeopardize the entire federal match for Title V services, including diabetes screening and management, asthma treatments and other services to low-income patients.

Walker and Smith also find $48 million in efficiency savings by centralizing and automating the Income Maintenance determination system. This would also reduce staffing by 270 FTE positions. Grigsby and other JFC members reminded Smith that not all participants have access to the Internet or may need the human touch to navigate through the system.

Smith said he understood the need for humans within the application program and added that public employees will be protected, since federal rules require a public employee to make the final eligibility determination.

Other changes suggested by Walker include reducing W-2 recipients checks by $200 to instill a sense that the program is a path to unsubsidized employment. He would also require W-2 recipients to complete 28-30 hours of work each week to maintain eligibility. The budget proposal also would remove legal immigrants who do not meet federal guidelines for food programming from the state’s FoodShare program, saving the Wisconsin $3 million dollars over two years.

Who is using the programs

According to the Economic Policy Institute, the number of Americans under 65 with employer-provided health insurance fell from 68.3 percent in 2000 to just under 59 percent in 2009. The percent of those same Americans who have enrolled in state-provided health plans has risen from 14.9 percent in 2000 to 21.4 percent in 2009.

In the period from 2008 to 2009, when the economic recession was at its worst, 141,000 Wisconsinites lost their employer-provided health insurance. During that same period more than 135, 000 state residents enrolled in state-sponsored programs.

The Kaiser Foundation noted that Medicaid enrollment increased in Wisconsin by 42 percent, nearly three times the national average, between Dec. 2007 and Dec. 2009. Prior to 2007, the annual growth in state Medicaid enrollment was 12 percent for children and 18 percent for adults.

Walker has acknowledged the increase in enrollment and continues to hold to his belief that the Medicaid rolls have to be reduced and refocused to the most needy.

Testimony on Gov. Walker’s budget proposals was heard in Superior and Stevens Point last week. On Monday, April 11, the JFC will hold a hearing at the Exposition Center at State Fair Park in West Allis. The public hearing will take place from 10 a.m. – 6 p.m.

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