Department of Health Services Secretary Dennis Smith's plans to cut Medicaid programs will impact individuals who earn as little as $14,000 a year, according to documents released on Friday afternoon.
Smith has also released his request to obtain a federal waiver to roll back Medicaid benefits and eligibility because the state is in an “economic emergency.”
If Smith doesn't receive permission from U.S. Health Secretary Kathleen Sebelius by Dec. 31 to make those changes, he is threatening to drop 53,000 low-income Wisconsinites from BadgerCare programs next July.
The Department of Health Services (DHS) estimates that the state would save $54.4 million from dropping these enrollees.
Smith also plans to shift 200,000 low-income Wisconsinites to a BadgerCare program with fewer benefits, make it more difficult to enroll in Medicaid programs and cap the Family Care program for disabled adults.
Robert Kraig, executive director of Citizen Action of Wisconsin, said that the cuts will threaten the health of Wisconsinites who are already struggling financially.
Kraig said the funding shortage was a deliberate policy decision by Gov. Scott Walker's administration that could have been avoided through raising taxes on large corporations and the wealthy, instead of giving them tax breaks in the state budget.
“This is their decision,” Kraig said of the Walker administration. “They are the ones who decided that in this recession, with poverty rates skyrocketing and [insurance] premiums increasing, that we should dramatically cut back BadgerCare—and to blame other people.”
Transparency and Oversight?
Smith was given permission to request the federal waiver and slash Medicaid programs via the state budget, initially drafted by Gov. Scott Walker and approved by the Republican-led state Legislature.
Republicans also handed Smith a $440 million budget hole—which has grown to $550 million, Smith said on Friday—and granted him the authority to make changes to Medicaid benefits and eligibility without holding a public hearing or requiring a vote by the full Legislature. Instead, Smith can submit his changes to the 16-member Joint Finance Committee (JFC) for a “passive review.”
Smith's document release included a letter to the JFC, which will start the process of the review. Public hearings are possible but not required.
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Democratic leaders countered on Monday by proposing a bill that would strip the health secretary of his unilateral powers over Medicaid and restore the Legislature's oversight.
In a press release announcing the proposed legislation, state Rep. Jon Richards (D-Milwaukee), one of the bill's authors, stated, “We strongly oppose any changes to our state's health programs that will result in our constituents losing, or being denied, affordable access to quality health care. We believe that changes of this magnitude should, at the very least, be done through an open, accountable and transparent process.”
Big Bite Out of Family Budget
Smith said in a Friday press conference that his proposed changes were “fair, they're focused, and they're common-sense.”
A big portion of Smith's plan is to eliminate BadgerCare eligibility for those who have insurance or those who can be covered by their employers if the premium costs less than 9.5% of household income.
The employers with the most employees on BadgerCare programs are Wal-Mart, McDonald's franchisees, Aurora Health Care, Roundy's Supermarkets, Manpower and Menards, according to the DHS website.
Smith argued on Friday that low-income workers could afford to pay more for private insurance.
But Jon Peacock, research director at the Wisconsin Council on Children and Families, said that the increased premium payments would take a huge bite out of a family's budget.
According to his preliminary calculations, a family of three (one parent and two children) that is at 151% of the federal poverty level earns an annual income of $28,000. Currently, this family's monthly premium is $10, or $120 annually, for BadgerCare. But if Smith's changes are made, that family would have to pay at least $2,400 annually on private insurance premiums—a big sacrifice for a low-wage earner with children.
Peacock said these families would likely go without health care, resulting in the increased use of emergency rooms for primary care, less preventative care, fewer doctors being compensated for care and more cost shifts to other consumers.
On Tuesday, Citizen Action of Wisconsin released a report showing how Smith's cuts could threaten the health care of a quarter-million Medicaid recipients with chronic diseases. The study found that an estimated 14,170 Wisconsinites on Medicaid have cancer; 55,680 received treatment for diabetes; 127,080 have chronic lung disease; and 140,540 have used Medicaid for treatment of heart disease or stroke.
