Senator Vinehout’s Healthcare Budget Wrap Up 2015

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Aug 24, 2015 No Comments ›› Admin

Dear Friends,

This letter is an update on changes related to health services passed in the recently signed state budget. I wanted you to know the latest.

The Governor’s budget put limitations on BadgerCare for childless adults (people who receive BadgerCare and do not have children under age 19 living with them) and made sweeping changes to Family Care and IRIS (Include, Respect, I Self-direct). These changes were strongly opposed by thousands of citizen advocates. Because of people’s advocacy, some changes were made to the Governor’s budget during the Legislature’s budget deliberations.

The largest program in the state budget is Medicaid. The program provides care for over one in five Wisconsin citizens. Medicaid is growing faster than any other state program. In fact, about 80% of the increase in tax revenue in the new budget went to fund Medicaid. Such an important program deserves careful oversight. This is why I have long advocated for an audit of Medicaid, an evaluation of the program’s effectiveness and detailed analysis of the cost drivers in the program. I also expressed concern about the 20% increase in state dollars going to private companies to administer Medicaid.

One aspect of the Medicaid budget the Department of Health Services (DHS) did not adequately anticipate was the increase in the number of childless adults seeking BadgerCare (Wisconsin’s version of acute and primary care Medicaid).

According to the nonpartisan Legislative Fiscal Bureau (LFB), the number of childless adults covered by BadgerCare was about 60% higher than estimates made by DHS staff in the last budget. These people often come into BadgerCare with no prior health care for many years. They often have chronic conditions that need management and medication.

The federal government offered the state money to cover categories of people new to BadgerCare. The fiscally responsible solution for Wisconsin would be to use the federal money to cover the increased number of uninsured poor adults. I strongly support using federal Medicaid expansion dollars offered under the Affordable Care Act. The LFB projected Wisconsin could save $360 million in state tax dollars in just this budget by accepting the federal dollars and expanding BadgerCare coverage.

Instead, the Governor and those voting for the budget made several changes for childless adult BadgerCare recipients. The changes include requiring health risk assessments and drug screening, increasing monthly premiums, and limiting BadgerCare coverage to 48 months. But state law alone does not put these changes in place.

Federal law requires the state seek permission to make such change because Medicaid is a state-federal partnership program. DHS must seek a “waiver” from the federal Center for Medicare/Medicaid Services (CMS).

I find the Governor’s 48-month limit on BadgerCare coverage particularly troubling. Uninsured adults who qualify for BadgerCare often struggle with chronic conditions. These folks have very limited income. They have delayed care and been locked out of the health system, or sought care in a hospital emergency room – the most costly place to receive care. To take away their health care after 4 years – just when they’ve finally gotten their chronic conditions under control- makes no sense.

Not only is this policy immoral – it is not likely to gain federal approval.

The feds allow “waivers” as a way for states to test new ways to deliver and pay for services under Medicaid. However, after my reading of what the feds approved in other states, I suspect they will not approve a waiver to restrict care to low-income childless adults –what appears to me to be a mandatory group of beneficiaries.

The Legislative Fiscal Bureau pointed out in a memo to the Joint Finance Committee that no state has gained approval from the federal government to broadly limit the length of time individuals can receive Medicaid. Additionally, no other state received approval for requiring drug testing or screening as a condition of Medicaid eligibility.

Federal law also requires an opportunity for public comment on rules waived at the request of states. This gives us an opportunity to turn advocacy efforts toward the federal level when the state submits its waiver. There will be a 30-day comment period in which the general public and stakeholders can submit comments.

I also have significant concerns with the sweeping changes proposed by the Governor to Family Care and IRIS. These two programs provide long term care services for about 55,000 people. These folks are of very modest means – less than $2,000 in assets – and are frail elderly, physically or developmentally disabled. Family Care is currently administered by non-profit managed care organizations like Western Wisconsin Cares.

In his budget, the Governor called for a complete redesign of Family Care by creating new statewide care management organizations, putting regulation of the managed care organizations under control of the Office of the Commissioner of Insurance, giving DHS authority to make significant changes in services offered, and eliminating IRIS as we know it. The Governor also called for an independent assessment for all prescribed fee-for-service personal care on top of the screening already required.

The majority of the Joint Finance Committee members supported most of the Governor’s changes. Actions in the committee kept the Aging and Disability Resource Centers (the one-stop shop folks can go to get help), eliminated IRIS as we know it, and changed Family Care so much that no current managed care organization could likely continue to provide services. The committee also allowed “any willing provider” including many local workers and agencies to provide services to the disabled and elderly for only the next three years. This action opens the door for a health maintenance organization (HMO) that typically limits the providers.

Self directed options would be available under the new insurance-like plan. However, self-directed services are fee-for-service plans and I cannot see how HMO plans could offer anything like our current IRIS program.

These actions jeopardize the independent and self-directed care plans for thousands of individuals. In a July 13, 2015 statement, the Survival Coalition of disability groups summed up the changes as follows: “This may open the door again for creating one statewide area or few regions and set the stage for out-of-state for-profit insurance companies.”

I have grave concerns for the continued well-being of our disabled and elderly neighbors, friends and family members and I fear they will be subject to the conditions and profitability of a big out-of-state for-profit insurance company. I also seriously doubt the administration’s claims the state will save money. Administrative allowances (overhead, marketing, profit etc.) in for-profit HMOs providing BadgerCare to the state is typically 12-14% compared to 2-3% in the current non-profit Family Care program. Wisconsin will have to pay for profit in a for-profit insurance company – something taxpayers do not now pay in Family Care and IRIS.

Just like changes in BadgerCare, the changes to long-term care included in the budget will require a waiver be approved by CMS. In my research, I found some evidence this waiver request may not be approved.

First, CMS requires Medicaid recipients in need of long-term care have an option in the delivery of services. In December 2007, CMS approved Wisconsin’s waiver of Family Care with changes – if Family Care enrollees were not given options for enrollment “the State would be out of federal compliance.”

What were the changes? The state began offering the option of the IRIS program. It seems to me under the changes proposed in the budget, the state once again will be out of compliance if Family Care participants are not given enrollment options.

Closely related to this requirement, under federal law states cannot require people who receive both Medicare and Medicaid from receiving care in only an HMO. At least 80% of the 55,000 Family Care and IRIS recipients receive both Family Care or IRIS and Medicare. This federal law means the state must provide an alternative to the for-profit HMO. Hopefully something like the current Fee-for-Service IRIS program.

By April 1, 2016 the DHS must make their waiver request public and seek approval by the Legislature’s Finance Committee. This public action gives people an opportunity to see the details of the proposed system and provide comment at the state level. Once the state submits it waiver to the federal government there will also be an opportunity for the public to weigh in with the federal government.

I very much appreciate the many people who shared stories about how changes to health programs impact them and their families. We must now all join together to stop detrimental changes through the Finance Committee and the federal Centers for Medicaid/Medicare Services.

Please know your stories and letters make a real difference. We must continue to advocate for services that provide real quality of life to those who need it the most. Our best approach is to join together and shine a light on those who sometimes live in the shadows. We can join together in this light of compassion and understanding.

Thank you again for your continued advocacy.



State Senator Vinehout ~ 31st Senate District

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Voters for Vinehout

P.O. Box 1274
Eau Claire, WI 54702