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Scott Walker's delay on restructuring BadgerCare Plus may save $23 million

By Jason Stein, Milwaukee Journal Sentinel
McClatchy-Tribune Information Services

Nov. 26--MADISON -- Taxpayers would save up to $23 million by having the state wait three months to implement Gov. Scott Walker's restructuring of BadgerCare Plus health programs, a new analysis shows.

The Republican governor himself is seeking the delay in his health care proposals to respond to the troubled rollout of the federal law known as Obamacare. The bill to approve the state delay was released publicly for the first time Tuesday and will come before the Legislature's budget committee and Assembly next week.

The legislation also would delay by three months the close of a state insurance pool for high-risk consumers. In a difference with current law, the bill would first use any surplus in that pool to avoid putting more taxes on insurers rather than offsetting insurer taxes and consumer premiums equally.

The legislation would delay from Jan. 1 until April 1 moving 72,000 adults just above the federal poverty line off Medicaid BadgerCare Plus coverage and onto an online federal insurance program that is still not ready to accept them. To pay for that, the bill would not take available federal Medicaid money and instead would pay for the extra expense by delaying the greater cost of adding a new group of 83,000 of the poorest adults to the state program.

An analysis of the proposal by the Legislature's nonpartisan budget office found it would cost state taxpayers about $17.2 million to keep the 72,000 slightly higher income patients on BadgerCare for the extra three months.

But the saving from not bringing on the additional 83,000 adults below the federal poverty line -- $15,510 for a couple -- comes to $40.3 million. In all, that means a $23.1 million saving on the health programs, according to the figures from the Legislative Fiscal Bureau.

The delay could mean a $2.8 million increase in state spending on hospital visits for prison inmates. But the bill won't increase the budget for state prisons, likely forcing the state Department of Corrections to cut back spending in another area.

The Legislature'sJoint Finance Committee is scheduled to vote on the proposed delay on Monday and from there the bill will go to the Assembly, where it will be taken up two days later on Dec. 4. The Senate is expected to vote on the proposal later next month.

Walker spokesman Tom Evenson said the bill would "protect our citizens from the federal government's failure."

"Under Governor Walker's plan, everyone living in poverty will be covered by Medicaid for the first time in state history. This delay will give Wisconsinites additional time, but the federal government must fix the issues with its health care exchange, so our people can make a logical transition," Evenson said.

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Sen. Tim Cullen (D-Janesville) disagrees with Walker's approach. The senator said that under the federal health law Wisconsin could receive additional federal money to pay the full costs of keeping both groups on BadgerCare through March.

In a letter Monday to Walker, Cullen praised the governor for not dropping the 72,000 people from BadgerCare but disagreed with the governor's plan for funding that decision.

"You intend to pay for the cost of extending Medicaid/BadgerCare to these low-income Wisconsin citizens by delaying coverage to even poorer Wisconsin citizens by the same three months. Put simply, you propose to pay to cover the second-lowest income group by delaying coverage to the very poorest Wisconsin citizens who have no coverage today," Cullen wrote.

In an interview, Cullen said he will seek to amend Walker's proposal to use the federal money to provide coverage to both groups through March.

Evenson dismissed that idea, arguing that state taxpayers can't count on federal taxpayers being able to pick up the tab.

"According to the Kaiser Family Foundation, Wisconsin is the only state that chose not to take the Medicaid expansion that will have no gap in coverage," Evenson said. "Governor Walker did not want to expose Wisconsin taxpayers to the burden that will come due when the federal government decides to break its promise to help fund Medicaid."

But Cullen said that argument didn't hold up for such a short period of taking the federal money.

"You have said you oppose taking the federal Medicaid dollars because you fear the federal government over time will not keep their commitment," Cullen said in his letter Walker. "We both know, however, that they will keep their commitment for three months!"

Assembly Speaker Robin Vos (R-Rochester) said he supported Walker's legislation and that it wasn't practical to seek the extra federal funding for such a short period.

"Why would I want to put people on a program for three months and then take them off?" he said.

The legislation released Tuesday also would delay for three months:

-- Walker's plan to drop BadgerCare coverage for children whose families make more than 300% of the federal poverty level.

-- The implementation of new federal rules for determining the composition and income of households for state Medicaid coverage such as BadgerCare.

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-- The phaseout of a bare-bones state insurance program, funded purely by participants' premiums and no tax dollars, that is known as BadgerCare Plus Basic.

-- The sunset of state high-risk health coverage known as the Health Insurance Risk-Sharing Plan, which had been scheduled to end on Dec. 31. Together with the plan's regular funding mix of premiums paid by participants, discounts from doctors and insurer taxes, an existing surplus of roughly $14 million in that program is expected to cover the cost of the roughly 20,000-member plan through March 31.

The legislation would require that before any additional taxes are assessed on insurers for the three-month extension, the existing surplus and additional participant premiums and provider discounts have to be used first, said Amie Goldman, chief executive of the quasi-public authority that runs HIRSP.

A spokesman for Walker's office of the commissioner of insurance didn't respond to a request for comment on reasons for the proposed change to the current funding scheme.

___

(c)2013 the Milwaukee Journal Sentinel

Visit the Milwaukee Journal Sentinel at www.jsonline.com

Distributed by MCT Information Services

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