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Wisconsin Rapidly Approaches Deadline to Qualify for a Large Increase in Medicaid Funding

April 6, 2020, by Jon Peacock

Lame Duck Law Has Hamstrung the Evers Administration’s Ability to Fight the Pandemic

Wisconsin faces a deadline of April 16 to qualify for hundreds of millions of dollars from federal Medicaid funding. Almost all of the other states have already qualified for the funding, and they have typically done so by executive branch action.

In Wisconsin, however, legislators and Governor Walker severely restricted the Evers administration’s ability to respond quickly to emergencies when they hurriedly passed a bill in December 2018 that sharply reduces the power of the executive branch. That bill, which became Act 370, is sometimes referred to as the “lame duck” law because it was passed during a lame duck session, which is a meeting of the Legislature between the November general election and the swearing in of newly-elected lawmakers.

A bill approved by Congress a few weeks ago enables states to receive billions of dollars of increased federal Medicaid funding if they meet certain conditions for eligibility by April 16. Thanks to the lame duck law, Wisconsin might become the only state that fails to qualify for the sharp increase in federal assistance – if the Legislature does not pass a bill by April 16 enabling the Department of Health Services (DHS) to make a couple of minor Medicaid changes and to apply for the enhanced federal funds. That could cost the state about $50 million for each month of the year in which the national emergency is in effect.

One of the conditions for receiving the very substantial increase in the share of Medicaid spending borne by the federal government is that states cannot increase premiums or make other changes that suppress Medicaid enrollment, after January 1 of this year. That means Wisconsin has to temporarily suspend a couple of changes to BadgerCare coverage of childless adults, including new premiums, which took effect on February 1. Act 370 prevents those changes from being made without approval of the full legislature, and it has also blocked other Medicaid changes necessitated by the looming health care crisis.

Because of the urgency of the COVID-19 pandemic, the Trump administration has given states a quick and easy process for getting federal waivers of Medicaid regulations that impede access to health services or adopting more efficient enrollment processes. As of Friday April 3rd, 45 states had taken advantage of that option for making Medicaid a stronger tool for protecting their residents, but in our state utilizing the expedited federal process is anything but quick and easy. Although the Evers administration has developed a comprehensive waiver proposal to make Medicaid more flexible and effective during the current crisis, they cannot submit it unless the Legislature meets and explicitly allows the proposed changes or suspends the lame duck law.

During such a rapidly growing and deadly epidemic, it’s understandable that legislators would not want to hold a floor session. However, the Republican leaders who pushed the lame duck bill through the legislature in just a couple of days should feel obligated to fix the problem they created when they blocked the ability of the Evers administration to act quickly during emergencies. Act 370 not only requires Medicaid changes to be explicitly authorized by statute, but also creates a cumbersome multi-stage process after that, which includes several different opportunities for the Joint Finance Committee to review and sign off on the changes.

Act 370 was rushed to passage despite widespread opposition. The opponents included a included a broad coalition of the major health care providers who warned that the proposed law could have ‘unintended consequences.”

The lame-duck bill caused a 180-degree shift from the approach that the Legislature took in 2011 during Governor Walker’s first year in office. The budget bill enacted that year granted the DHS Secretary unprecedented authority to make sweeping changes in Medicaid policy, even if those changes conflicted with state statutes or administrative rules. It was almost a total transfer of legislative authority to set Medicaid policy. But after Evers was elected, the same legislators thought that the role of the executive branch should be the opposite of the sweeping authority given to the Walker administration.

Because the Legislature created the current roadblocks to quick agency action, it needs to fix the problem by repealing or suspending the lame duck law and doing so as rapidly as they passed that law.

If the Legislature fails to act, Medicaid will be a much weaker tool in Wisconsin than it should be as health care providers battle the pandemic. In addition, legislative leaders need to understand that failing to pass a bill by April 16 would cost our state hundreds of millions of dollars of federal funds that will be urgently needed in the months ahead. Act 370 is playing out as many opponents cautioned, and now the Legislature is the group that can make sure Wisconsin has the resources it needs.

Jon Peacock