CONTACT: Seth Boffeli, (608) 266-1683
BADGERCARE BASIC ENROLLMENT FROZEN
Program Runs Multi-Million Dollar Deficit in First 9 Months
MADISONCiting several million dollars in cost overruns, the
Department of Health Services announced today that it has frozen
enrollment for the BadgerCare Basic program effective Friday March 18th.
Nine months after the first individual was enrolled in Basic, expenditures
are outpacing premium revenues by nearly $2 million.
"It is unfortunate that we need to take this step. We will
maintain coverage for those currently on the program and help new
applicants find alternative coverage," said DHS Secretary Dennis G.
Smith. "BadgerCare Basic was never intended to be funded with state
taxpayer dollars. Unfortunately, the design of the program and the
decisions made by the previous administration were unsustainable. In order
to prevent a cost shift to the state taxpayers we must suspend enrollment
and increase premiums."
Through February of 2011, the Basic program has taken in $4.18 million
in premium revenue and paid out $5.83 million in claims. In addition, more
than $1 million in federal grant funding that was intended to be used as a
"cushion" has been completely expended. Not factored into these
numbers is the fact that claims often lag for up to three months, meaning
the program is likely in even worse fiscal position than the numbers show.
In fact, DHS estimates that once all the claims are submitted, BadgerCare
Basic may have already accrued a deficit in the range of $5.7 million.
"From the very beginning there have been doubts about the
sustainability of this health plan. Unfortunately, it appears those doubts
were well founded," said Secretary Smith. "The Basic program is
a prime example of good intentions that created unrealistic expectations -
but it isn't the only example."
Changes to premiums will be communicated to enrollees in advance of
increases taking effect. DHS anticipates making a final determination on
premium increases in the coming months. The BadgerCare Basic program is a
self-funded health care program for adults without dependent children who
were unable to enroll in BadgerCare Core.
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Last Revised: March 18, 2011