Family coverage is made part of Wisconsin’s BadgerCare; enrollment trigger is escape hatch
Small but growing number of states are using Medicaid expansion to cover parents of CHIP kids
Wisconsin has joined a handful of states using an expansion of Medicaid to cover otherwise ineligible parents as part of the state’s health insurance program for poor children. And what began as a trickle could become a torrent if other states opt to take the same path.
The expansion of BadgerCare, Wisconsin’s version of the federal Children’s Health Insurance Program (CHIP), was approved by the Health Care Financing Administration (HCFA) in late January and incorporates a Section 1115 waiver for Medicaid benefits for the parents. BadgerCare is slated to cover an additional 23,000 children by October 2000, an almost 18-fold increase over the original’s plan’s projections of 1,300 children by the same date. Some 22,300 parents of children will be offered Medicaid coverage under the waiver.
Coverage for parents has traveled a rocky road in Wisconsin, as state officials were wary of extending coverage to parents under an "entitlement" program such as Medicaid and HCFA saw no latitude to extend coverage to parents under CHIP. The compromise that resolved the impasse is an enrollment trigger for BadgerCare. If enrollment appears likely to exceed what state officials had projected, they will be able to lower the income threshold for new applicants, but existing BadgerCare enrollees would be allowed to continue in the program.
"I think that kind of grandfathering provision was very important for us," says Angela Dombrowicki, director of the bureau of managed care within the state’s department of health and family services. "It gave the state of Wisconsin the certainty it needed that BadgerCare wasn’t an entitlement."
Wisconsin program managers turned to a Medicaid expansion for parents when they were blocked from using the conventional CHIP route. "There was no way that we were to be able to cover families in the way we wanted, as expansive as we wanted, under CHIP," says Ms. Dombrowicki. "That was very clear."
BadgerCare also contains provisions that address crowdout—the threat that CHIP will supplant private health insurance. As required by federal law, the CHIP component of BadgerCare will not be available to those with private health insurance. Additionally, anyone with private health insurance in the previous three months or whose employer would pay at least 80% of the cost of family coverage is ineligible for the program.
BadgerCare allows Wisconsin to supplement the cost of private health insurance, but the provisions are so strict that state officials expect very few people to take advantage of the option. Following federal direction, Wisconsin is requiring that the employer pay 60% to 80% of the premium, that the family not be covered by an employer-sponsored plan in the previous six months, and that covering the entire family through this option is more cost-effective than covering children alone through CHIP.
The number of people expected to take advantage of the employer subsidy is so small that state officials have not estimated the size of this group separately from the total number of parents expected to enroll in BadgerCare.
Outreach efforts described in the plan amendment are expected to reach an additional 7,300 children currently eligible but not yet enrolled in Medicaid.
The first phase of Wisconsin’s plan was approved in May 1998, but under state law, BadgerCare implementation could not begin until approval of the second phase. State officials will begin in April to enroll an estimated 2,000 teen-agers 15 to 18 years old in families with incomes of up to 100% of the federal poverty level, which is $16,450 for a family of four.
The expansion will include all remaining children in families with incomes of up to 185% of poverty who are not currently covered by Medicaid. Once a family is enrolled, it can remain in the program until its income reaches 200% of poverty.
A provision in the plan to cut off eligibility at 185% of poverty but allow existing enrollees to remain beyond that threshold is designed to protect families with incomes that fluctuate a little, Ms. Dombrowicki says.
Wisconsin, like all states with CHIP plans, will receive federal matching funds only for actual expenditures to insure children. Wisconsin is eligible to receive as much as $38 million in new funds for fiscal year 1998. The BadgerCare benefit package will be the existing state Medicaid package. Families with incomes above 150% of poverty will pay a premium of 3.5% of annual income.
With the expansion for parents, Wisconsin becomes one of a handful of states that have broadened Medicaid to previously ineligible parents of covered children. Jocelyn Guyer, a policy analyst with the Urban Institute in Washington, DC, notes that Wisconsin’s Section 1115 was sought, in part, to allow the state to implement provisions addressing crowdout and is not necessary simply to expand eligibility.
Ms. Guyer notes that Rhode Island and the District of Columbia recently have used state plan amendments to expand Medicaid coverage of parents of enrolled children, Rhode Island to 185% of poverty and the District of Columbia to 200% of the poverty level. (See story on expanding coverage without waivers, State Health Watch, October 1998, p. 1.)
Such Medicaid expansions without waivers are made possible by complex and largely obscure provisions of the welfare reform legislation, says Ms. Guyer. "I really think a lot of states haven’t focused on this. We think it’s starting to get out there a little bit," she says.
Contact Ms. Guyer at (202) 408-1080. The Urban Institute report, "Employed But Not Insured, A State-by-State Analysis of the Number of Low-Income Working Parents Who Lack Health Insurance," by Ms. Guyer and Cindy Mann, is available on the World Wide Web at www.cbpp.org/2-9-99mcaid.htm.
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