$81 Million GPR Increase for Medicaid Spending, But Small Reduction in Cuts

The Joint Finance Committee (JFC) took up Medicaid issues this week and added a total of $250.6 million (all funds), including $81.1 million in state GPR funds – over the amounts recommended by the Governor. That’s a relief in several respects, but the net result is only a modest improvement to the bill, because most of the spending increase offsets a higher estimate of the base level cost of the state’s Medicaid-related programs.

The increases in state GPR spending approved by the committee Tuesday evening include the following:

• $53.6 million to partially reflect the Fiscal Bureau’s estimate that the cost to maintain the program is likely to be significantly more than DHS projected (reflecting continued projections of enrollment increases);
• $14.4 million for SeniorCare – including $15 million more for the cost of removing the Governor’s proposal to require SeniorCare participants to enroll in and rely primarily on Medicare Part D, minus $555,000 because of a lower estimate of the base level cost of maintaining the program;
• $10 million to mitigate the increases in Family Care waiting lists; and
• $3.7 million to continue funding the Essential Access City Hospital (EACH) payments.

We’re pleased that the committee was willing to use part of the state’s reserves (from the recent $636 million increase in tax revenue); however, two-thirds of the spending added by the JFC merely serves to keep the cuts from getting worse – as a result of the reestimated cost of continuing the Medicaid-related programs.

Advocacy groups were generally disappointed in the committee’s approval of most of the Governor’s cuts:

• A press release today from the Save BadgerCare Coalition expresses the group’s concerns about approving $466 million of unspecified cuts that can be made by DHS with little legislative oversight and which are likely to result “in a dramatic increase in the number of uninsured people in the state.” 
• A release issued by AARP applauded the committee for rejecting the SeniorCare change, but expresses strong disappointment in the Family Care portion of the budget.
• A press release from the Survival Coalition of Wisconsin Disability Organizations says they were “stunned” by approval of the Family Care freeze, and they note that: “The Committee’s decision to freeze all long-term care programs, except nursing homes, will seriously undermine the cost effectiveness of the state’s long-term care system. The only entitlement the committee left intact is a right to live in an institution.”

The committee is expected to wrap up its work on the budget bill late next week, andthe bill will then be reviewed by both houses of the legislature.

Jon Peacock