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The Associated Press November 10, 2011, 3:39PM ET

Wis. Republicans approve Medicaid cuts

Medicaid cuts expected to result in about 65,000 poor people leaving the health insurance programs have been approved by the Legislature's Republican-controlled budget committee.

All Republicans on the Joint Finance Committee voted Thursday to approve the plan by Gov. Scott Walker's administration. All four Democrats opposed it. The plan now heads to President Barack Obama's administration for approval.

Supporters of the proposal to cut more than half a billion dollars from Medicaid say it's necessary given rising costs in the rapidly expanding programs that currently provide services to about 20 percent of Wisconsin's population.

But Democrats and other opponents argued the cuts are inhumane and would force the state's most vulnerable to lose coverage.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Republicans who control the Legislature's budget committee said Thursday they would not change a proposal to cut about $554 million from state Medicaid programs that provide health insurance to poor children and families.

The changes sought are expected to cause about 65,000 people to leave the programs.

Co-chairs of the Joint Finance Committee said before a hearing on the plan that they were comfortable with the proposal from Republican Gov. Scott Walker's administration, which they said would preserve BadgerCare programs without even greater benefit cuts, cost increases or eligibility denials.

Democrats on the committee, who don't have the votes to stop it, called the plan inhumane and unjust because some people will no longer afford to have insurance.

If approved by the committee Thursday as expected, the plan goes to President Barack Obama's administration, which must grant a waiver for it to take effect.

"I think all of us wish we could do more, but the money just isn't there," said committee co-chair Rep. Robin Vos, R-Caledonia.

The Medicaid programs cover about 1.1 million people, or about 20 percent of the state's residents. Medicaid has grown by nearly 10 times the rate of the state's population during the past 20 years, driven both by need and expanded program offerings.

The roughly $554 million in cuts were needed because of that growth combined with a loss of one-time federal stimulus money.

The Department of Health Services plan would shift more than 200,000 families enrolled in BadgerCare Plus into cheaper programs with reduced benefits. The plan also requires families to pay a 5 percent premium if they make more than 150 percent of the federal poverty level and forces people off the program if they have access to affordable insurance through their employer. Young adults with access to coverage through their parents also would be removed.

Advocates argued against the changes, saying they will remove a safety net for the state's neediest people and force them to live without health insurance.

"People forget that there are names, faces, real people affected by these cuts," said Sara Finger, executive director of the Wisconsin Alliance for Women's Health.

Walker's administration isn't making Medicaid a priority and its changes will simply shift costs to the private sector and families who can't afford it, said Robert Kraig, executive director of Citizen Action Wisconsin.

"Wisconsin needs jobs and not cuts to programs that help us stay on our feet," said Heather DuBois of Sun Prairie, who was on BadgerCare when she was pursuing her doctorate degree and her husband was unemployed.

But Republican lawmakers and DHS leaders said the alternatives, including forcing even more people off the program or dramatically reducing benefits, were even worse.

The changes as proposed will result in about 65,000 people leaving the program, according to the nonpartisan Legislative Fiscal Bureau. About 28,000 of them are people who would be removed from the program if they have access to employer sponsored plans that require a contribution of less than 9.5 percent of their household income.

Another 19,000 people, about 12,000 of them children, are expected to leave the program under a change that requires families to pay a 5 percent premium if their income is 150 percent or more above the federal poverty level. A parent with two children would have to pay $116 a month. State employees in a comparable plan have to pay $201 a month starting next year, according to DHS.

About 2,800 young adults between the ages of 19 and 26 would be forced to join their parents' health insurance plans.

Health Services Secretary Dennis Smith defended the changes, calling them reforms that will put Medicaid programs on stronger footing.

"What we are trying to do is bring Medicaid into the modern era," he told the committee.

Sen. Alberta Darling, R-River Hills, said opposition to the plan was not as great as she anticipated largely because it doesn't make any changes to programs for the disabled or SeniorCare, the popular prescription drug program for the elderly.

"When you have changes, there is fear and anxiety and that's to be expected," she said.

If the federal waiver is not granted, the state plans to tighten income eligibility requirements from 200 percent of the federal poverty level to 133 percent. That would force more than 50,000 more people out of the program.

Currently, a family of three earning up to $37,060 is eligible. Without the waiver, the cutoff would drop to $24,645 for the same family.

Federal health officials announced last month that they would not reimburse $45 million in Wisconsin Medicaid expenses that Walker's administration was counting on. The reduction package doesn't address that shortfall. Vos said that will be addressed later.

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