The Associated Press December 9, 2011, 4:33PM ET

Wisconsin gets OK for some Medicaid cuts

Gov. Scott Walker's administration received preliminary approval Friday from the federal government for some Medicaid cuts it sought to balance a budget shortfall, but a final determination won't come until later, raising the possibility 53,000 people may lose coverage in the meantime.

Walker's Department of Health Services had said if all the cuts weren't approved by Dec. 31, it would be forced to kick 53,000 people off of BadgerCare Plus next year by tightening income eligibility. In Friday's letter, the director of the federal Centers for Medicare and Medicaid Services said Walker's deadline was unlikely to be met.

Noting that the changes sought would be dramatic for those affected, CMS Director Cindy Mann said "these proposals require time for review and careful consideration."

Mann said the federal government needed more time to work together with the state to more precisely describe the proposals, analyze how they align or differ with the law, and consider the impact of those now covered by Medicaid programs.

Wisconsin DHS spokeswoman Stephanie Smiley said the letter was being reviewed and discussions were under way about how the state would respond.

U.S. Rep. Tammy Baldwin, D-Wis., said it was unreasonable to seek a decision from the federal government in less than a month. The state submitted the proposal on Nov. 10 after it won approval from the Legislature's Republican-controlled budget committee. Baldwin, who is running for the U.S. Senate, urged Walker to seek alternatives.

"Forcing thousands more uninsured families to go without health care or end up at the emergency room for costly care will not reduce health care spending, and is the wrong prescription for the state's budget woes," she said.

Walker's administration proposed a total of about $554 million in Medicaid cuts to deal with rising costs and exploding enrollment. Advocates for the poor and uninsured labeled the cuts as unjust and inhumane.

The changes Walker sought were projected to result in 65,000 poor adults and children leaving state health insurance programs, either because they would no longer be eligible or they could no longer afford coverage.

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

Without approval, the state threatened to tighten income eligibility requirements from 200 percent of the federal poverty level to 133 percent. That would force about 53,000 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.

The Walker administration's plan would shift more than 200,000 families enrolled in BadgerCare Plus into cheaper programs with reduced benefits. It would also remove young adults with access to coverage through their parents.

The federal government on Friday did approve three parts of Walker's plan.

It gave the OK to require families to pay a 5 percent premium if they make more than 1 1/2 times the federal poverty level and force people off the program if they have access to affordable insurance through their employer if their share of the premium is below 9.5 percent of their income.

The federal government also approved removing adults and children from the program for one year if they fail to pay their monthly premium without an excuse. As it is now, adults can be dropped for six months but children can't lose coverage.

The state also received approval to stop paying claims to people dropped from the program 10 days after their eligibility ends instead of allowing them to continue receiving benefits through the end of the month.


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