2011-2013 Medicaid Efficiencies
Commonsense Changes to Medicaid – Fair and Focused
The mission and cost of Medicaid in Wisconsin have expanded
dramatically over the years. One out of every five citizens are now
served in one of our various programs (traditional Medicaid, BadgerCare
Plus, SeniorCare, and Family Care). Medicaid pays for 45 percent of all
births in the state. Medicaid recipients occupy roughly 60 percent of
nursing home beds.
State funding for Medicaid had to be significantly increased above
last biennium's budget, primarily for two reasons – federal matching
funds decreased by $1.33 billion and the previous budget estimates were
based on a projected decline in enrollment. But even after an infusion
of $1.2 billion of additional state funding for the current budget
cycle, we need to find savings to keep the program in balance
with the state budget.
Current enrollment in Medicaid is now 1.1 million individuals. Over
the past 20 years, the total population of Wisconsin has increased 16
percent, but Medicaid enrollment has jumped 156 percent.
One out of three children in Wisconsin is now on Medicaid. Medicaid
is no longer exclusively for individuals living below the poverty level.
More than 120,000 children live in families with income above the
federal poverty level; nearly half of these children live in families
with income above 150 percent of the federal poverty level.
The picture of how individuals are covered by insurance has changed
dramatically over the years. In 1997, the year in which the state
Children's Health Insurance Program (S-CHIP) was created, 76 percent of
children living in families with income between 100 and 200 percent of
the federal poverty level (FPL) were covered by private insurance. In
that year, just 14.5 percent of children in that income category were
covered by public programs. By 2009, children with private coverage had
declined to 56 percent and public coverage (principally through our
Medicaid programs) had increased to 43 percent.
Although the switch between public and private coverage has been
dramatic, it is still important to understand that most children living
in families with income between 100 and 200 percent FPL are covered by
private insurance and the parents of these children are therefore
bearing the cost of coverage (as well as contributing to the cost of
those on the Medicaid programs through taxes). Moreover, Medicaid
provides a richer benefit package for children than what is typically
offered in the private sector.
In 1997, only 6.5 percent of adults (ages 18-64) with income between
100 and 200 percent FPL were covered by a public program and 70 percent
were covered by private health insurance. By 2009, 30 percent of such
individuals had public coverage and those with private coverage dropped
to 49 percent.
There are approximately 53,000 non-disabled, non-elderly adults on
Medicaid with income above 133 percent of FPL. The federal government
has advised that these individuals can be dropped from coverage, which
would save the state over $60 million GPR per year. We are determined to
avoid this option, but believe it is a matter of fairness that families
enrolled in Medicaid who have income comparable to their neighbors
should be expected to contribute a reasonable amount to the cost of
Last year, more than 1.4 million individuals were enrolled in
Medicaid for at least part of the year. Spending is concentrated among a
small group of individuals. Over half of enrollees incurred costs of
$1,000 or less in 2010 and accounted for less than 5 percent of total
costs. But 58 percent of all Medicaid spending was made on behalf of
just 5 percent of the population. There are about 40,000 individuals who
are elderly or have a disability (or both) enrolled in the Family Care
program, which provides supports and services to those in need of long
term care. Their combined Medicaid costs (long term care and acute
medical care) exceed $1.5 billion. Many of the individuals in Family
Care are also enrolled in Medicare but those costs are not included.
The changes we are proposing are described individually in detail
below. Savings are generated across each of the four different
categories of reform – eligibility, benefits, service delivery, and
payment. We also still have proposed changes under development, so
please check back periodically for updates. We value your comments and
each will be considered before we formally submit changes to the federal
government for approval.
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Last Revised: November 01, 2011