Wisconsin’s 1115 Waiver Approved – Bad News/Good News

By Wesley Prater

Medicaid waivers have been a very hot topic lately!  Just take a look at my colleague Joan Alker’s blog on recent action around waivers.  You may have heard that CMS recently approved Wisconsin’s 1115 waiver for the state’s BadgerCare program.  Most of the changes will affect adults with incomes over 133% of the FPL.  Premiums will be increased for adults, retroactive eligibility will end, and adults will be dropped from BadgerCare for a year if they miss a premium payment, just to name a few of the changes in the waiver.  The waiver is set to begin on July 1, 2012 and end on June 30, 2013.  All of the changes in the waiver are summarized in this brief written by Jon Peacock from the Wisconsin Council on Children and Families.  Governor Walker’s administration claimed that the waiver would also give Wisconsin the opportunity to align with the Affordable Care Act (ACA) and test what’s going to come in 2014 and Jon Peacock also wrote a great brief on why this waiver is actually totally inconsistent with the ACA.

In situations like these, I often try to not just look at the bad news but also attempt to find the good news.  It helps me to start with the bad news, that way I can leave my thinking on a positive note.  The bad news, or maybe I should say the worst news, from this waiver is that 17,000 adults are expected to lose coverage.  Additionally, Wisconsin is still seeking federal approval for an Alternative Benchmark plan that would limit benefits and increase co-pays for 300,000 people in BadgerCare.

However, the good news is that the maintenance of effort (MOE) provision in the Affordable Care Act will protect many children and their parents from losing coverage and Secretary Sebelius refused to waive it.  In its first proposal, Wisconsin wanted to raise premiums, end retroactive eligibility, etc. for not only adults, but also for children.  Had the state’s original proposal been approved, it was estimated that 65,000 people would have lost coverage, including 29,000 children.

Other states might want to take note of CMS’ decision to not waive the MOE in Wisconsin.  Secretary Sebelius has made it clear that HHS will not be approving any MOE waivers in other states either.  When asked about waiving MOE requirements in Wisconsin last month, she replied.

“That isn’t something that will happen in Wisconsin or any place else. We are eager to work with states for ways to save money but also to keep the most vulnerable people with the health care that they need.  Short-term money saving often ends up with a less productive workforce with folks coming in through the doors of the emergency room with no payment system at all. That leads to more uncompensated care and higher cost for disease.  It’s a lose-lose situation.”  (Source: Tim Stumm, Wisconsin Health News, April 12).

I hope you agree with me that it’s better to leave on a positive note…