As stimulus rules supercharge costs, pressure grows to expand the unaccountable program in Wisconsin
Diggings: Medicaid on Red Alert
As stimulus rules supercharge costs, pressure grows to expand the unaccountable program in Wisconsin
By MARK LISHERON | April 2021
As Gov. Tony Evers renewed his call to expand Medicaid coverage in Wisconsin, Democrats in Washington, D.C., were doing some of the heavy lifting for him in the name of battling COVID-19.
Because of guidelines imposed by the CARES Act, the first coronavirus stimulus package, there are now more than 1 million Wisconsinites on Medicaid — an increase of nearly 217,000 in the past year, at an added cost to taxpayers of more than $883 million a year.
And until and unless the economy returns to something resembling normal, Medicaid’s enrollment and its cost will continue to balloon.
Medicaid, a program along with Medicare that didn’t exist until 1965, now devours roughly 25% of Wisconsin’s $41 billion in annual total expenditures.
Nationally, it is the third largest and one of the least accountable government programs in the country, a model of a program ostensibly state-based but chained to an unaccountable federal funding source. The unholy relationship has created a system so bureaucratically knotted as to defy all attempts at reform.
Even more concerning, according to the federal Centers for Medicare & Medicaid Services (CMS), more than $100 billion of all Medicaid payments made to keep the program running were improper or illegal.
** Entrenched, expensive, painful
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U.S. Sen. Ron Johnson (R-Wis.) made clear, in a December letter to then-CMS Administrator Seema Verma, there is no accounting for all of this waste and fraud by state Medicaid officials.
But when CMS attempted to require fiscal accountability guidelines created by specialists in the Trump administration last year, a coalition of state Medicaid officials, hospital administrators, medical vendors and politicians in both parties fought them.
“It’s insane. You have all of these health providers who have based their business model on a horribly complex and distorted marketplace controlled by the government,” Johnson told the Badger Institute. “How do you fix something so entrenched, that is way too expensive and way too painful to change?”
The steep cost of keeping record numbers of Wisconsinites on Medicaid may give added political leverage to Evers and Democrats who wanted the state to accept an expansion first offered in 2010 by the passage of the Affordable Care Act, or Obamacare, Johnson says.
Wisconsin is one of 12 states that have not yet accepted an offer from the federal government to pay 90% of the cost of new enrollees to Medicaid. CMS has for years reimbursed the state Department of Health Services (DHS) at a rate of between 58% and 60%.
Republican Assembly majorities have blocked the expansion out of opposition to Obamacare, federal spending in general and a fear that state taxpayers would be made to pay if the federal Medicaid commitment was ever slashed.
“This was the whole strategy of Obamacare, to break the willpower of the fiscally responsible states,” Johnson says. “The whole point of all of this money poured into programs like Medicaid is to get more Americans addicted to a single-payer system. It’s completely out of control.”
DHS administers Medicaid in two primary ways: a program for the elderly, blind and disabled and a program called BadgerCare Plus to underwrite primary and emergency medical care for low-income children, parents, other childless adults and pregnant women.
** String attached to the program
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Medicaid enrollment in Wisconsin was shrinking during the economic rebound in each of the first three years of the Trump administration. Enrollment dropped steadily to below 775,000 in January 2020, according to DHS figures.
Then in April 2020, enrollment jumped 5% in a single month and by another 3.2% the next month. By July, there were more than 100,000 new enrollees, and through March there were 993,851 people on the rolls, a 27.9% increase from March 2020, according to DHS.
Through December, Wisconsin had the fourth fastest-growing Medicaid roll among the 28 states included in a study by the Kaiser Family Foundation, a major health policy research group. Only Nevada, Missouri and Indiana had bigger percentage growth.
Those increases were to have been expected with the worldwide spread of a novel virus and economic havoc caused by governments in response to it. They were, however, buttressed by a little-discussed provision that prohibits states from dropping anyone from the rolls if they accepted stimulus funding for Medicaid included in the CARES Act.
Wisconsin agreed to funding in two ways, the first in the form of increased federal reimbursement to 65.57% from its normal roughly 60%. In addition, the state Division of Medicaid Services (DMS) received $183.6 million, including $75.6 million for nursing homes, $44.4 million for home and community service providers, and $38.3 million for assisted living facilities, according to figures provided by DMS in response to an open records request.
Passage of the $1.9 trillion second stimulus in early March will mean the state will have a choice of matching an as yet undetermined fraction of the roughly $10 billion in the bill for Medicaid home and community services nationwide.
The bill also offers a $16 billion “teaser” to the holdout states like Wisconsin that would for two years raise the matching rate of support for Medicaid to 95% from 90% if they agree to expand their programs permanently..
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This article first appears in the Spring 2021 issue of Diggings. Click
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