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Politics & Government

Saving Medicaid through Financial Solvency

Since the Doyle expansion, enrollment in Medicaid has skyrocketed and state tax revenues have not been able to keep pace.

In recent weeks, Democrats have unleashed a vicious assault against Governor Scott Walker and Republicans in the State Legislature for implementing reforms that will bring fiscal solvency to the Medicaid program, ensuring its long-term survival. 

Their attack smacks of politics, because Medicaid would have run a deficit so big that leaving the problem unattended would have plunged our state back into fiscal crisis and endangered the future of the program.

I first ran for State Assembly in large part because politicians in Madison were making promises that any reasonable person could see were impossible to keep.  The biggest of those was the massive Jim Doyle/Democratic expansion of the Medicaid program that provides health insurance coverage for low-income, disabled and elderly Wisconsinites. This promise was made at a time when recession and lower tax revenues loomed on the horizon – a perfect example of foolish Washington-based budgeting coming to our State Capitol.

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As a result, entering the 2011-13 budget deliberations, Medicaid was a staggering $1.8 billion in the red. The legislature was able to work with Governor Walker to find $1.2 billion in revenue to fill part of the Medicaid deficit, but that left well over $500 million in savings yet to be found. As such, the legislature gave the state Department of Health Services the ability to find these savings through reforms.

Since the Doyle expansion, enrollment in Medicaid has skyrocketed and state tax revenues have not been able to keep pace. Current enrollment in Medicaid is now 1.1 million individuals. Over the past 20 years, the total population of Wisconsin has increased 16 percent, but Medicaid enrollment has jumped 156 percent. To address these deep, structural issues, the following are among the steps we are proposing:

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  • Members who have access to reasonable-cost health coverage through their employer or parents rely on that coverage rather than Medicaid.
  • Higher-income recipients (above 150% of federal poverty level) contribute a larger premium for their coverage. This would make their contribution closer to what their neighbors with private coverage might pay.
  • Benefit coverage and co-pays for most BadgerCare Plus members above 100% FPL be aligned with most widely available commercial health plan in the state, with certain benefits added to reflect the special needs of the population.
  • Phase out “presumptive eligibility” as the state implements “real time” eligibility determination for BadgerCare Plus. Currently, when someone applies for BadgerCare, it is assumed they are eligible and their coverage starts immediately – even though we may find out later that they are, in fact, ineligible.

Some have engaged in cynical scaremongering, accusing Republicans of slashing benefits to the poor, disabled and elderly. The truth is that, under the proposed changes, individuals would lose coverage only if 1) they make the choice to not pay a fair share to the cost of their care; 2) their income when properly counted increases above 200% FPL; 3) they have affordable private coverage available to them; or 4) they are not residents of Wisconsin.

The actions we are taking will keep Medicaid solvent into the future. It keeps the best coverage possible for members while treating taxpayers fairly. We can be proud of the many programs available to give the less fortunate the opportunity to improve their lot in life, but we must be careful to keep such programs financially sustainable and within taxpayers’ ability to pay.

To contact me with any questions or comments or to sign up for my regular e-updates, please send an e-mail to Rep.Knodl@legis.wi.gov or call me at (608) 266-3796.

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