Wisconsin Waiver Would Create Unprecedented Barriers to Medicaid Access

Wisconsin officials are seeking unprecedented changes in the state’s Medicaid coverage for adults without dependent children.  The draft proposals (summarized here) would significantly increase the number of uninsured Wisconsinites, make the state less healthy, and impede efforts to increase the Wisconsin workforce.

From a national perspective, the section 1115 waiver that Wisconsin is seeking would break new ground in a number of very negative ways. Most importantly, it would establish the dangerous precedent of using the waiver process as a means to reduce access to Medicaid, rather than meeting the statutory standard that the purpose of waivers is “to assist in promoting the objectives” of the Medicaid Act.

More specifically, the draft waiver unveiled by the Department of Health Services (DHS) on April 19 seeks federal approval to waive laws that currently prevent Wisconsin from implementing the following changes to “BadgerCare” coverage for childless adults:

  • Charging monthly premiums for almost all childless adults below the poverty level;
  • Imposing a 48-month eligibility limit; and
  • Requiring drug screenings as a condition of eligibility.

The proposed waiver would impede our state’s ability to achieve three key goals set by Governor Walker: expanding the Wisconsin workforce, avoiding having a coverage gap in our state’s health care system, and cutting in half the number of uninsured Wisconsinites.

DHS is accepting comments on the draft waiver until May 19, and the department tentatively plans to finalize its waiver application within the following week, in order to formally submit the waiver to the Center on Medicaid and Medicare Services (CMS) on May 26. Once CMS notifies a state that a section 1115 waiver application is complete, that triggers a 30-day period to submit comments to CMS.

The proposed change that we think would have the broadest negative effect on insurance coverage is the plan to charge premiums for almost all childless adults participating in BadgerCare. Dozens of studies have found that even small increases in premiums cause many low-income people to lose their insurance coverage.

This part of the waiver would require monthly premiums to be paid by single childless adults making more than $200 per month, so it would adversely affect people who are nearly destitute and who often do not have checking accounts or credit cards. Many of those adults will become uninsured and will have to rely on emergency rooms as their fallback source of health care, which will add to the cost of hospitals’ uncompensated care. In addition, trying to collect small monthly premiums will be a tremendous headache for the local agencies charged with that task.

The 48-month time limit is likely to cut off care for some of the people who need Medicaid the most – adults with chronic conditions.  Although it includes some exemptions, those do not apply to individuals with substance abuse diagnoses.  Substance abuse is a chronic disease, and many BadgerCare participants may need some kind of treatment beyond the 48-month lifetime limit in order to help them stay drug free and participate in the workforce.

The drug screening/testing measures, like the required premiums, would be expensive to administer. It would a major step backwards because it treats drug addiction as a moral failing rather than a disease. The state could use the funding far more effectively to remove barriers to employment, including the shortage of drug treatment and prevention programs. Since Wisconsin already has waiting lists of people who need and want drug treatment, spending scarce state dollars on new screening and treatment requirements will add to the waiting lists and divert resources from more effective solutions.

In short, the proposed waivers wouldn’t only hurt low-income adults now participating in BadgerCare. Those changes would also result in a less healthy workforce and a significant increase in the uncompensated care costs that hospitals shift onto their insured patients. And they will waste state funds that could be used to implement far more effective strategies for expanding the Wisconsin workforce by removing barriers to work.

Our short summary of the proposals can be found here. You can submit comments on the proposals until May 19 by going to this WCCF webpage.

Editor’s note: a Federal comment period on the Wisconsin waiver will open soon.