Beginning the long and, likely winding, road to enact a biennial state budget, Governor Tony Evers delivered his first budget address to a joint session of the Legislature February 28. Evers’ budget proposal is a $83.4 billion spending plan along with several key policy changes, including an expansion of Medicaid to 82,000 people in Wisconsin, roughly half of whom are uninsured and half that will come off commercial coverage, including heavily subsidized individual health plan coverage in the exchange.
Evers’ full expansion proposal would make Wisconsin eligible for enhanced federal funding to cover some newly eligible individuals and 140,000 childless adults already covered on Medicaid below the poverty line. According to Evers’ budget, this move provides an estimated $320 million in savings to state coffers, offsetting state Medicaid costs through new federal revenue. The Evers budget assumes Medicaid expansion July 1, 2019, less than four months from now.
In its budget-in-brief document, the Administration says, “the Governor recommends that the $300+ million in state savings saved in the 2019-21 biennium through Medicaid expansion be reinvested back to the providers and institutions serving Medicaid recipients.”
Over the last four months, the Wisconsin Hospital Association has been calling on lawmakers to use any savings realized from Medicaid expansion to reinvest in health care access and offset additional Medicaid losses for hospitals resulting from an expansion of Medicaid coverage.
The Governor’s budget bill, according to the Evers Administration, includes $365 million in hospital reimbursement increases by doubling the Medicaid Disproportionate Share Hospital program, making childless adults eligible for Medicaid access payments, doubling the recently-enacted Rural Critical Care supplement and creating other supplemental payment programs. The Governor’s budget also includes various other proposals designed to improve access to care for Medicaid populations, including $69 million in behavioral health provider reimbursement increases and a designated funding pool for services provided to patients with physical or intellectual disabilities in need of dental care.
In a statement, WHA President/CEO Eric Borgerding said the Association is “pleased Governor Evers has included reimbursement increases for hospitals in his state budget bill, and is targeting areas of greatest need, such as urban and rural safety net hospitals and improving access to behavioral health services, dental care for special needs patients and primary care.”
“Improving Medicaid reimbursement and expanding access to care are bipartisan issues that WHA has worked successfully with both parties to address, and we look forward to doing so again in the coming months,” continued Borgerding.
WHA also noted the Governor’s budget includes full funding for the Wisconsin Healthcare Stability Plan, a WHA-backed, bipartisan reinsurance program enacted last year aimed at stabilizing what had been sky-rocketing health insurance premiums on Wisconsin’s individual insurance market. Wisconsin has experienced 4.2% reduction in individual health insurance premiums since the reinsurance legislation was passed into law. Overall, Wisconsin has seen a 41% reduction in the uninsured rate since 2013.
“WHA has been a strong advocate of increasing coverage for the uninsured and stabilizing and reducing premiums for the insured, and Wisconsin has effectively leveraged state and federal policy to achieve both aims,” Borgerding said in a statement. “WHA is committed to engaging Governor Evers and the Legislature to build on what Wisconsin has accomplished and work toward solutions to further stabilize the market and expand coverage.”
The budget bill now heads to the state Legislature’s Joint Finance Committee. Republican leaders in the Legislature have signaled their general opposition to Evers’ Medicaid expansion proposal.