States that have not yet decided to expand Medicaid to low income adults and parents are considering their options, and some are hoping to experiment with charging monthly premiums.  New data from Wisconsin provides a helpful reality check.  Slightly more than two-fifths of the lowest income adults paying premiums—who did not exit BadgerCare or Transitional Medical Assistance for some other reason—lost coverage due to non-payment of a premium.

In 2012, HHS approved a waiver that allowed Wisconsin to charge premiums in BadgerCare for parents and adults without dependent children at 133 percent of the federal poverty level and above.  The waiver took effect on July 1, 2012, and requires a single parent with two children at 133 percent of the federal poverty level to pay $65 per month in premiums (or 3 percent of income). Premiums then increase based on income from there.

A new paper by the Wisconsin Council on Children and Families examines data contained in the Wisconsin Department of Health Services’ preliminary evaluation.  Focusing on the lowest income adults paying premiums—18,544 parents and caretaker relatives on BadgerCare or Transitional Medical Assistance who in July 2012 had incomes between 133 and 150 percent of the federal poverty level—the data show the following effects in the first six months of implementation of these premiums:

•   Only 31 percent of the adults in that income range who were participating in BadgerCare in July 2012 were still in the premium-paying category six months later. 
• Failure to pay a premium caused 21 percent of the original 18,544 to lose their coverage within six months. 
•  Slightly more than two-fifths of relevant enrollees lost coverage due to non-payment of a premium. 

These numbers are in line with research that shows that raising premiums in Medicaid and CHIP dramatically reduces enrollment. 

Wisconsin’s pending waiver would allow Wisconsin to apply premiums to all parents above the poverty line in Transitional Medicaid.  CMS will take public comments on this proposed Wisconsin waiver online here until September 22, 2013.