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Wisconsin Medicaid Proposals Don’t Merit Federal Approval

Wisconsin plans to seek federal permission to make unprecedented changes to its Medicaid program that would likely cause large numbers of adults without dependent children to lose coverage or fail to enroll. Under the Social Security Act, the Secretary of Health and Human Services may only approve a state request for a waiver from federal Medicaid law if the proposed changes promote Medicaid’s objective of delivering health care to vulnerable populations who can’t otherwise afford it. Wisconsin’s proposed waiver doesn’t meet this test because it would:

  • Impose monthly premiums on beneficiaries with incomes above 20 percent of the poverty line, and take away their coverage for six months if they don’t pay. Adults without dependent children with incomes as low as around $200 a month would have to pay premiums or risk losing coverage for up to six months. So, for example, a low-wage worker who misses her premium payment one month to pay the rent or fix her car couldn’t go to the doctor, fill a prescription, or get other non-emergency care for the next six months or until she could pay the premiums.

    A large body of research shows that premiums significantly reduce low-income people’s participation in health coverage programs. That’s probably because they already have trouble paying for housing, food, and other basic needs and can’t stretch their budgets to pay for health care. The federal government has never allowed a state to lock people with incomes below the poverty line out of coverage for not paying premiums.

  • Establish a time limit on Medicaid eligibility. Adults under age 49 without dependent children would lose coverage for six months after 48 months of enrollment, but months in which they’re working or participating in job training wouldn’t count toward that 48-month limit. This change, also unprecedented, seeks to fix a problem that doesn’t exist. The vast majority of Medicaid beneficiaries already work or have conditions that prevent them from working, like suffering from physical or mental health problems, attending school, or caring for a family member.

    Wisconsin’s plan would exempt people who can’t work for various reasons, leaving very few beneficiaries subject to the time limit. But for that small group — for example, someone who lacks transportation and can’t find a job where they live — the impact on access to care, health, and financial security could be severe.

    Wisconsin says the time limit is to control health care costs, but saving money isn’t an allowable purpose for Medicaid waivers. Moreover, the time limit would require tracking beneficiaries’ activities each month to see whether they’re working or eligible for an exemption. The related state administrative costs would far outweigh any potential savings from forcing a small number of people off the program for six months.

  • Subject adults without dependent children to drug screening and testing. To get health coverage, all adults without dependent children would have to complete a drug screening questionnaire, and those whose answers suggest possible abuse of controlled substances would have to complete drug testing and treatment.

    The federal government has never allowed drug testing in Medicaid, which would likely deter some people from seeking coverage and getting needed health care due to the consequences of a positive test or, more likely, the invasive and burdensome process that can require taking time off work and finding transportation for a separate trip to the Medicaid office. An assessment of seven state programs that drug-test applicants for Temporary Assistance for Needy Families (TANF) found that they’ve identified very few drug users. (In fact, TANF applicants have lower rates of drug use than the general population.) Moreover, Wisconsin admits that treatment may not even be available given the current demand for treatment, which undercuts its rationale for requiring testing.

The Trump Administration says it’s willing to expand the use of Medicaid waivers, but the law itself hasn’t changed. Waivers should only be allowed to carry out a demonstration project that has a sound design and promotes Medicaid’s objectives. Specifically, federal criteria say waivers should strengthen coverage, increase access to providers, improve health outcomes, and increase the efficiency and quality of care. A project like Wisconsin’s, which would erect barriers to coverage and shift Medicaid funds from coverage to administrative costs, doesn’t merit approval.