Researchers find flaws in Medicaid restrictions bill, and in the ideas behind it

By: - April 14, 2023 5:30 am

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)

Advocates for a bill that would impose new restrictions on how Wisconsin renews Medicaid enrollment contend that they are necessary to combat fraud and prevent dependence on government programs on the part of the lowest-income residents of the state.

But analysts who have studied poverty and health care say that the new rules would worsen health care for some of the state’s most vulnerable residents, driving up costs in the process. The proposed changes would also in many instances violate federal law.

Without significant changes, Gov. Tony Evers is almost certain to veto Assembly Bill 148 if it ever reaches his desk. A year ago, Evers vetoed an almost identical piece of legislation, and in his veto message cited the same objections that advocates who oppose the measure as well as health care researchers have raised about the new provision.

“I think this is all about political message,” said state Rep. Lisa Subeck (D-Madison), in an interview Thursday. Subeck is a member of the Assembly Health, Aging and Long-Term Care Committee, which conducted a public hearing Wednesday on the bill. 

“And it is at the expense of real people, hard-working families and individuals in our communities,” Subeck said. “I would also argue that we should be working hard to expand access to health care coverage, not reduce it, if we want people to be able to work.”

An aide to the bill’s author, Rep. William Penterman, (R-Columbus), said the Wisconsin Examiner’s request for an interview Thursday would be relayed to the Assembly member, but there was no further response. 

Tricia Brooks
Tricia Brooks, Georgetown University

“Assembly Bill 148 is a solution in search of a problem and it places an unnecessary burden on the very people our health insurance programs are trying to help,” says Tricia Brooks, a research professor at Georgetown University’s Center for Children and Families. “It’s really about poor people and creating or exacerbating the health inequities and disparities that we see in low-income populations, in which people of color are disproportionately represented.”

The legislation was introduced a week ago. It comes just as recipients of Medicaid, called BadgerCare in Wisconsin, must, for the first time in three years, requalify annually for the program.

Until the COVID-19 pandemic, Medicaid recipients were required to requalify for the program every 12 months, documenting that their income was at or below the federal poverty guidelines — the ceiling for Medicaid eligibility in Wisconsin. The program is jointly funded by the federal government and the state.

When the pandemic federal heath emergency was declared in early 2020, Congress passed legislation suspending the annual requalification requirement and directing states to guarantee continuous health coverage to people on Medicaid. In late December 2022, Congress ended that requirement effective April 1. 

Over the three years that the continuous coverage requirement was in effect, Wisconsin’s Medicaid enrollment went from 1.2 million to 1.6 million, according to the state Department of Health Services (DHS), which administers the program. 

DHS has not released a public estimate of how many Medicaid participants are enrolled whose incomes are now above the federal poverty guideline, making them ineligible. But for the last year federal and state health officials have been preparing for the transition back to annual requalification. Wisconsin is phasing in that process over a 12-month period.

At odds with federal rules

AB-148 would require DHS to confirm financial and other personal information against any other records for the individual in other state agencies, and it would require DHS to share its own data with other agencies operating public assistance programs.

At the same time, however, it would bar DHS from automatically requalifying  recipients, even if it had the data in hand to do so. It would also bar the health department from sending renewal forms partly or completely filled out in advance for recipients to correct and return. 

Those provisions are at odds with each other, says Brooks, who previously managed New Hampshire’s Children’s Health Insurance Program (CHIP) and a Medicaid and CHIP consumer assistance service. 

Brooks has seen the federal Centers for Medicare & Medicaid Services (CMS) increase the efficiency of the renewal process by pushing states to use available electronic data to automatically verify a person’s eligibility. 

Blocking that would effectively “revert the state’s primary renewal system back to antiquated, inefficient and administratively costly paper-driven processes are that are solely intended to make it difficult for people to enroll and retain coverage,” she says.

“It’s ironic that the legislation would require the state to have data-linkages to reliable electronic sources that can confirm eligibility and yet mandates that the state set up a duplicative paper-driven system that will overwhelm state workers and is clearly intended to make it difficult for eligible people to retain their coverage,” Brooks observes.

The bill also violates several regulations, she adds: one that requires automatic verification as much as possible when data is available; one that requires states to send Medicaid recipients prepopulated renewal forms; and one that forbids states from requiring recipients to qualify more frequently than every 12 months — the bill would require requalification every six months.

Stability, not dependency 

Don Moynihan, a political science professor at Georgetown, says that over the last couple of decades, research has largely undermined the notion that public benefit programs such as Medicaid create dependency. What they do, he says, is help people live healthier lives and avoid bankruptcy.

“There’s a fairly well-established body of research that access to benefits tends to improve long-term prosperity and education,” says Moynihan, whose work focuses on administrative burdens in government programs.  “These investments really do pay off both for the individual and then, in the long run, for taxpayers by helping to produce a more prosperous and engaged citizenry.”

When the concern that someone might misuse a program leads policymakers to make it too difficult for an eligible person to enroll, that “results in you actually stopping people who are needy and who are legally eligible from getting those services.”

For people whose income fluctuates from month to month, as it does for many poor people, “Medicaid creates this big problem of churn,” he adds, with people temporarily forced out of the program, then returning later. “That creates problems of instability for the individual families as well as making it more difficult to manage the program.”

 Instead of fostering dependency, Moynihan adds, stable support can allow people to move out of benefit programs in the longer term.

“You look at programs like SNAP [the federal nutrition program] and Medicaid,” he says. “We know that access to these programs helps people to actually avoid later life dependency, because they’re more likely to become educated, they’re more likely to earn more later in life.”


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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary.