In his 2015-2017 state budget, unveiled when he was about to launch a presidential campaign, Gov. Scott Walker proposed sweeping reforms to Family Care and IRIS, the state’s long-term care programs for almost 60,000 disabled adults and frail seniors.
Walker’s plan would transfer Family Care and IRIS participants from local, nonprofit-managed care organizations to regional insurance companies.
These insurance companies would become “integrated health agencies” (IHAs) and cover both primary health care as well as the kinds of long-term care services Family Care and IRIS provide so that recipients can live independently in their home, not in a nursing home.
The reforms are expected to roll out in 2018.
The blowback last year from Family Care and IRIS participants and their advocates was so fierce that legislators changed Walker’s plan. In the final version of the budget, the Department of Health Services (DHS) was directed to flesh out what’s dubbed Family Care/IRIS 2.0 in a concept paper, to be delivered in April 2016. Then, the budget-writing Joint Finance Committee (JFC) would give an up-or-down vote on the plan, which would need ultimate approval from the federal Centers for Medicare and Medicaid Services.
DHS delivered its concept paper in April, as required.
But since then, a funny thing has happened.
Nothing—in public, at least.
JFC Co-chair state Sen. Alberta Darling (R-River Hills) sent 25 questions to DHS, which responded to them.
But no vote has been scheduled on what had been one of Walker’s “big, bold” reforms in the state budget.
And if the JFC doesn’t pass it, then it won’t be implemented.
Not Enough Votes to Pass?
Because they control both houses of the state Legislature, Republicans make up 12 of 16 positions on the JFC, which, assuming Democrats are all opposed, means that up to three Republicans could vote no and Family Care/IRIS 2.0 could still pass.
But the committee’s lack of action likely means that at least some Republicans aren’t toeing the party line.
“I can tell you that there’s a reason why we haven’t met yet,” said state Sen. Jon Erpenbach (D-Middleton), a member of the JFC. “The reason is that there is not enough support for it.”
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Republican JFC Co-chair state Rep. John Nygren of Marinette has told reporters that the Republican Assembly members are ready to vote yes on the changes. So the reluctant Republicans would have to be senators.
The Shepherd contacted all Republican senators on the committee, but hasn’t gotten a response from any of them, including Sen. Darling, the JFC’s co-chair.
Erpenbach chalked up the JFC’s inaction to the lack of details in DHS’ proposal—“It’s so thin you couldn’t walk on it,” he said—as well as the upcoming election. Five of the senators and all of the Assembly members on the JFC are up for election in November, and they’re likely unwilling to make these sweeping changes before voters head to the polls, Erpenbach said.
“If I’m a Senate Republican on the committee up for re-election or an Assembly Republican, I don’t want to touch this,” Erpenbach said.
The JFC senators up for re-election in November are Darling, Sheila Harsdorf (R-River Falls), Luther Olsen (R-Ripon) and Tim Tiffany (R-Hazelhurst). Sen. Lena Taylor, a Milwaukee Democrat, is facing re-election as well.
Taylor's office responded to the Shepherd's request for comment after our print deadline. Her aide, Craig Trost, said Taylor was opposed to Walker's Family Care reform.
All four JFC Democrats released a statement on Monday decrying the changes and questioning the need for them. In it, Taylor states, “Government is supposed to help those less fortunate, not exploit them so someone can turn a buck.
Team Walker talked up Family Care as a national model and then threw 60,000 lives into uncertainty with this change."
Advocates Keep Up the Pressure
Another reason for the Republicans’ stalling is that Family Care and IRIS participants and their advocates didn’t ask for the changes, nor do they think that the state should disrupt the long-term care services of disabled and elderly people without a good reason. They’re also poking holes in the state’s arguments in favor of the reforms and putting pressure on legislators to require DHS to fix the proposal or reject it outright.
“If you’re going to do this there’s going to be upheaval,” said Lynn Breedlove, co-chair of the Wisconsin Long-Term Care Coalition. “If there’s going to be upheaval that should only be justified by a very positive result, either in the form of improved quality and improved outcomes for people in the system or big savings. If those things aren’t happening then we step back and say, why disrupt people’s lives this way? And why potentially put all these Wisconsin-managed care organizations out of business?”
DHS has claimed that the changes will save the program $300 million in its first six years. That figure apparently comes from an estimate of savings in a small program used in the state, then extrapolated and applied to the proposed reforms on the table.
The nonpartisan and highly respected Legislative Fiscal Bureau did not come up with that estimate, nor did it craft a fiscal note that will be attached to the program, which would lay out the costs and savings of the proposal, confirmed DHS spokeswoman Julie Lund.
Lund confirmed that all of the savings would come from the health care portion of the IHAs’ services, not from their long-term care services.
“It is anticipated that this model will slow the growth of health care expenditures over time by keeping members healthier and thus reducing the need for health care services, avoiding the necessary utilization of acute care services, and minimizing duplication of services,” Lund emailed the Shepherd.
Long-term care advocates say that forcing IHAs to cover both health care and long-term care isn’t necessary.
“I actually believe that there are some savings that could be had on the health care side,” Breedlove said. “But I also believe you could get those savings without having to blow up the current Family Care program and IRIS program.”
Advocates are also taking issue with the new integrated health agencies (IHAs), which need to be licensed by the state as insurance companies. The state would be split into three regions, each with three IHAs to provide services.
The plan would allow the new IHAs to reap up to 2.5% of profit annually. Currently, the nonprofit managed care organizations are allowed to keep 1% for administration and reserves.
Stephanie Sue Stein, the former Milwaukee County Department on Aging chief who launched Family Care in Milwaukee, said the IHAs would likely cut long-term care services to cut costs or make profits.
“In other states with this model, the home-based services take a back seat to health care,” Stein said. “It’s not important to them.”
Both Stein and Breedlove warned that only very large for-profit insurance companies would be able to become IHAs and that most local managed care organizations would be forced to shutter or be taken over. Just two managed care organizations have state insurance company licenses, iCare in Milwaukee and Care Wisconsin, Breedlove said.
Breedlove said the large IHAs wouldn’t have the kind of commitment to Family Care and IRIS that the current managed care organizations do.
“We’ve seen in Wisconsin and examples in other states where insurance companies started up and were very enthusiastic and they operated for a year or two or three and they didn’t meet their profit expectations and they said we’re out of here,” Breedlove said. “That’s something that DHS kind of dismisses as not a serious concern. But we think it is a concern.”
Stein said DHS has done little to nothing to inform recipients about the proposed changes, even though the programs are essential to their health and independence.
“This affects people who basically depend on this help for their life, and that’s very, very scary,” Stein said.
