Wisconsin advocates worry federal plan to increase Medicaid paperwork will lead to lost coverage

Wisconsin health advocates say proposed administrative changes to Medicaid will likely lead to fewer people maintaining health coverage and higher costs for the state.

Republican leaders on the House Energy and Commerce Committee released their proposed changes to the joint federal and state insurance program Sunday evening. It's one piece of Congress' work to enact President Donald Trump's agenda and cut $1.5 trillion in federal spending.

Medicaid serves people with low incomes, those with disabilities and older adults. In Wisconsin, programs like BadgerCare and FamilyCare cover 20% of state residents. That includes 38% of Wisconsin children and 60% of people in nursing homes, according to the state Department of Health Services.

One of the biggest changes put forward by House Republicans is creating a work requirement for adults without dependents or disabilities. Individuals are required to provide documentation of 80 hours of work each month or participation in community service, education or a work-training program.

Some Wisconsin Republicans in Congress have voiced their support for adding work requirements. In a post on X last week, U.S. Rep. Tom Tiffany pointed out that 80% of Wisconsin voters supported a 2023 advisory referendum that asked whether "able-bodied, childless adults" should be required to look for work "in order to receive taxpayer-funded benefits."

"Able-bodied, working-aged, childless adults should not be allowed to sit on the couch and collect Medicaid benefits that you are paying for," Tiffany wrote in the post.

But state health officials have warned that adding work requirements would increase the state's costs to operate Medicaid by millions of dollars each year.

A DHS report at the end of April estimated implementing work requirements would cost the state up to $6 million annually in added administrative costs. DHS estimated providing training and employment services similar to a program under the state's Supplemental Nutrition Assistance Program, called FoodShare, would cost the state around $340 per person each month, or a total of $60 million annually.

Scott Stewart is executive director of the Wisconsin Primary Health Care Association, which represents the state's community health centers where many Medicaid patients and those who are uninsured receive care. Stewart said the majority of adults with Medicaid coverage in Wisconsin are already working or would qualify for an exemption because of age, disability or their work as a full-time caregiver.

"With work requirements, we're really finding that there's not that much value to them," Stewart said. "For the most part, they just create more administrative hurdles in an attempt to make it so that people can get disenrolled. And that's not how we want our healthcare system to run."

House Republicans' plan includes other administrative changes, including significantly delaying two federal rules developed under the Biden administration to make it easier for people to enroll and maintain coverage.

One rule would have made it easier for older adults with low incomes to use Medicaid to pay for costs not covered by Medicare, what's commonly referred to as dual eligibility. The changes in the GOP proposal are listed under a subsection referring to reducing fraud and improving the enrollment process.

The plan does not include more drastic changes to eligibility or how the federal government shares Medicaid costs with states. But Bobby Peterson, executive director of Wisconsin-based public interest law firm ABC for Health, said the proposals are meant to reduce the number of people receiving coverage.

"People have to be savvy to the issue that you can cut Medicaid without cutting eligibility," he said. "All those little things will add up to people not getting to the coverage that they need. All those will add up to people getting more medical bills and medical debt."

Peterson said higher rates of unpaid medical debt ends up getting passed on to all patients when health care systems raise the price of care. He points out that Wisconsin hospitals already provided nearly $1.4 billion in uncompensated care in 2023.

The proposed changes to Medicaid are expected to lead to at least $715 billion in savings, according to an estimate by the nonpartisan Congressional Budget Office. The office found 8.6 million people would lose their health insurance in the next 10 years because of the changes.