Come Jan. 1 some 92,000 low-income Wisconsin residents stand to lose their BadgerCare Plus health insurance or, if they continue to qualify for the program, start paying a premium.
The Pineda-Ortiz family -- Alfredo, Laura and their two daughters -- are among those affected. They recently received a letter from the Wisconsin Department of Health Services informing them they are eligible to keep BadgerCare Plus coverage -- Wisconsin's Medicaid system -- but will have to pay a premium to do so. They won't know the cost of the premium until sometime in December, though, and their first payment is due Jan. 10.
"I am worried," says Laura. "I don't know how much it will be, and I don't know how we'll be able to pay it."
The couple have a take-home income of roughly $1,800 a month and a monthly mortgage payment of $1,400 for a house they bought when both were employed. But Laura, who previously held jobs in food service and factories, has been unable to work since being diagnosed in 2010 with an autoimmune disease. The family has adjusted by growing vegetables in a community garden plot, eating a lot of rice and beans instead of meat, and buying only essentials. Still, they barely get by.
One of the things they absolutely need is health insurance. Laura's disease requires regular visits to the doctor and prescription drugs.
Their ordeal is part of the fallout from Wisconsin's decision to turn down Medicaid expansion funds from the federal government and lower the household income maximum from 133% of the poverty level to 100%. Under this scenario, those who no longer qualify for BadgerCare are supposed to be funneled into the new health care marketplaces created under Obamacare. While the marketplace might be an option for the Pineda-Ortiz family, they have not yet been able to figure out whether leaving BadgerCare for the marketplace would be a better deal for them because of the website's technical snafus.
Whatever the cost on the marketplace turns out to be, it will likely be significantly higher than if the family lived in Minnesota, according to a report published recently by Citizen Action of Wisconsin. Wisconsin health insurance exchange premiums for single coverage will be on average 79% to 99% higher than premiums in Minnesota, before tax credits are applied. That is a difference of more than $1,800 a year.
Report co-author Kevin Kane says the higher rates stem from Wisconsin's rejection of Medicaid dollars and its failure to implement a rigorous review of health insurance rates. He says Gov. Scott Walker's refusal to build a state-based exchange in favor of a federal exchange also stripped policymakers of additional tools for moderating rates.
Walker's office did not return calls requesting a response to Citizen Action's report.
Kane calls the administration's decision to reject the Medicaid funds, estimated to have brought in $4 billion through 2020, "immoral."
When Walker announced his decision in February to forgo these funds, he said he would instead work to increase health coverage for residents by lifting an enrollment cap on Medicaid programs for childless adults, tightening income eligibility for state residents able to use Medicaid programs, and moving people into the health care exchanges, where they can buy private insurance.
"Some people will portray this as not caring about people," he said at the time. "I think it's just the opposite. I care too much about the people of this state not to empower them to control their own destiny."
Jon Peacock, research director for the Wisconsin Council on Children and Families, predicts that 70,000 Wisconsin families with children will lose coverage under BadgerCare.
"A significant problem with the budget plan is that many of the low-income adults who are over the poverty level will end up uninsured because they won't be able to pay the premiums and other cost-sharing for marketplace coverage," wrote Peacock in an October blog. "In addition, many adults in that income range don't have checking accounts or credit cards and will have great difficulty simply with the logistics of paying premiums and co-payments."
Peacock says in an interview that these families should start shopping for coverage on the marketplace now. But, he adds, "The fact that online enrollment is not functional is a huge problem for those folks."
Fearing a bottleneck of people trying to register in December, Peacock would like to see the state delay implementation of the new standards for at least six months to allow people more time to figure out what they should do.
"Another layer of messiness is that Wisconsin delayed work on the computer software for the new standards and rejected another pot of federal money that would have helped pay for that work," Peacock says. "This foot-dragging has created a terrible situation."
When asked why Wisconsin has been slow to update computer software to reflect changes in eligibility standards, Department of Health Services spokeswoman Claire Smith, who would only respond to questions by email, did not answer directly.
Instead, she wrote, "Once the systems have been updated in late November, the department's eligibility determination system will generate person-specific letters or 'Notices of Decision' will be sent in late November notifying households of members who will be transitioning to the marketplace and any change in benefits, including monthly premiums, to members who will remain enrolled in BadgerCare Plus."
The Pineda-Ortiz family is caught in the middle of this bureaucracy.
Originally from Mexico, Alfredo and Laura are now U.S. citizens and say they have always worked hard to improve their lives and join the middle class. Alfredo's income from his midlevel management position at an ink cartridge factory is now all they have to support themselves and their kids, who are 7 and 12 years old.
"We don't want to be dependent on government assistance," Laura says. "But we have to accept it given our situation. We work hard. We volunteer in the community. We both are getting more education so we can get better jobs with health insurance." She shrugs. "We just have to wait and see what happens."
The letter from the state to the Pineda-Ortiz family included a phone number (888-794-5556) to call for more information. But dialing it gets only a recorded message: "We do not have information about what premiums will be at this time. There is nothing you need to do right now. You will receive another letter telling you about your premium amount in December."
Not too late
Kane of Citizen Action says it's not too late for Wisconsin to claim its share of Medicaid funds.
"We could accept the funding tomorrow, next month, or next governor," he says, noting that governors in Pennsylvania and Ohio, who initially rejected the money, have done an about-face and applied for it.
Kane believes that will eventually happen here, too: "It's just too appealing to too many people."
[Editor's note: Gov. Scott Walker announced Thursday, Nov. 14 that he would ask lawmakers in a special session to delay for three months his plan to move some 70,000 residents off of BadgerCare and onto the insurance exchange set up under Obamacare.]