Proposed budget ties Medicaid expansion to better pay for health providers
Evers administration plans outreach to hospitals to back previously rejected provision
The Wisconsin state office building housing the Department of Health Services (DHS), previously the Department of Health and Family Services before the agency was split into separate departments. (Baylor Spears | Wisconsin Examiner)
The Evers administration is proposing to increase Medicaid reimbursement to hospitals and other health care providers in the 2023-25 budget — but only if Wisconsin accepts the federally subsidized expansion of Medicaid that Republican lawmakers have repeatedly rejected over the last decade.
The administration plans to meet with hospital industry executives in the coming weeks to enlist their support for the budget’s allocation of $35 billion over two years to the Department of Health Services (DHS) — especially for the measure to expand Medicaid.
“A key budget priority is Medicaid expansion, and how expanding access to affordable health care helps our workforce,” DHS Deputy Secretary Deb Standridge told reporters in an online press briefing Thursday outlining highlights in the proposed budget drafted by Gov. Tony Evers.
With some exceptions for children and pregnant mothers, Wisconsin limits Medicaid coverage, called BadgerCare, to people with incomes at or below 100% of the federal poverty guideline. Under the Affordable Care Act, the federal government subsidizes states to cover adults with incomes more than a third higher — 138% of the poverty guideline.
If Wisconsin were to accept expansion, “This means [providing] health care coverage for a single person who has an annual income of $18,754 or a three-person household with an income of $31,781,” Standridge said. “The bottom line is that Medicaid expansion would provide high-quality, low-cost Medicaid coverage for 89,700 Wisconsinites.”
With the accompanying federal subsidy covering 90% of the added cost, Wisconsin would save $1.6 billion over the budget’s two-year cycle, she said, allowing the state to direct more resources to public health, behavioral health, and supporting hospitals and long-term care programs.
Evers’ proposed two-year budget includes a $626 million increase in payments to hospitals and a $250 million increase in Medicaid reimbursement rates for primary care providers as well as for autism treatment services, outpatient mental health and substance abuse disorder services and child adolescent day treatment, according to a DHS summary.
“Those are enabled by implementation of [Medicaid] expansion,” said Andy Forsaith, DHS budget policy director. “And then the budget also explicitly conditions implementation of a regular hospital rate increase and an increase for primary care services in Medicaid, to expansion.”
Former Gov. Scott Walker rejected the federal Medicaid expansion program and the subsidy throughout his time in office. After he lost reelection in 2018 to Evers, who ran vowing to accept expansion, Walker signed a bill passed by the Legislature’s Republican majority that blocked the incoming governor from authorizing the change on his own. Wisconsin is now one of 11 states that has not accepted the Medicaid boost.
The 2023-25 budget is the third Evers has introduced since taking office — each including a Medicaid expansion provision. Republican lawmakers in control of the budget committee have twice rejected it.
In seeking a different outcome, “We’re engaging with a lot of stakeholders to tell our story about Medicaid expansion,” Standridge said.
That includes outreach to employers to explain how expansion “can help their workforce in terms of providing coverage for people who need to find jobs and retain jobs,” Standridge said — particularly small business employers who can’t afford to offer health benefits or whose health benefits cost too much for lower-wage employees to afford.
“So we will go out and tell our story, and hopefully engage our stakeholders to also tell our story to our legislators,” she said.
Meeting with hospitals and providers, who have a stake in the improved Medicaid funding and other aspects of the DHS spending plan, is also on the agenda.
“We’re going to be engaging in conversations with the hospital industry,” Standridge told the Wisconsin Examiner. “We have a great relationship with Wisconsin Hospital Association and the hospitals across the state, whether it be the rural hospitals, critical access hospitals, community hospitals, tertiary care [hospitals], etc.”
In addition to Medicaid expansion, the proposed health budget would bolster public health, invest in mental health resources and attempt to address widespread workforce struggles that health care employers face.
Wisconsin currently spends $72 per state resident a year on public health programs, 62% of the national average of $116 and second lowest after Nevada.
“Public health activities lay the groundwork for healthier communities,” Standridge said. “They protect us from diseases and injury that we cannot prevent alone and help us change behaviors that are harmful to our health.”
At $572 million in the first year (2024) and $432 million in the second year (2025) of the budget, the Evers proposal “makes Wisconsin’s largest investment in public health to date,” she said. That includes programs for maternal and infant health, emergency medical services support, childhood lead poisoning prevention and a wide range of other priorities.
An even larger pool of funds is being directed toward mental health programs, with $675 million in 2024 and $698 million in 2025, with priorities that include school-based telehealth programs, community mental health services, suicide prevention and drug abuse treatment programs.
The budget’s health care workforce investments include grants to recruit workers and train more people in health professions, Standridge said, building on grants the administration made from the state’s federal pandemic relief funds.
Proposals include a $22.5 million grant program to support recruitment and retention strategies as well as $100 million for workforce grants to train health workers, said Forsaith. There are also funds for recruiting specific professions such as physicians and psychiatrists.
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