Although Gov. Scott Walker’s budget keeps Medicaid coverage for children the same in this budget cycle, a provision could give the health department flexibility to drop coverage for thousands of children starting in 2019, pending federal approval.

The Wisconsin Council on Children and Families outlined their concerns about the “resurrected” proposal Tuesday, as the federal government rejected the proposal in the 2011 budget. That year, the change would have led to 64,000 people losing their Medicaid coverage – 29,000 of them being children. 

The Department of Health Services has “no immediate plans” to make the changes and is seeking flexibility in case the department wants to do so in the future, spokesperson Claire Smith said in an email to The Badger Herald. 

If DHS does decide to make the changes in the future, the department would still need federal approval, Smith added.

“It is important for the department to have the flexibility to make these reforms, should we decide to pursue them in the future,” Smith said.

The series of changes include making children ineligible for Medicaid if their parents can get insurance through employers and if that plan costs less than 9.5 percent of the family income. The report noted, however, the plan’s costs are measured from employee-only plans, not more expensive family plans, due to a “glitch” in the federal health care law. 

Another change would charge premiums for children in families who make 150 percent of the poverty level, rather than the current 200 percent starting point for premiums. 

Another would “lock children out” of Medicaid for a year if they are above 150 percent of the poverty level and their parents miss a monthly payment, rather than the current six-month suspension for those children.

WCCF Research Director Jon Peacock called the proposal a “mistake” because it would make Medicaid unaffordable for many families and complicate the health care law’s implementation.

He said the proposal should be taken out of the biennial budget, as discussions on the budget have focused on more immediate issues, including Gov. Scott Walker’s larger plan to reform Medicaid and reject federal expansion funds.

“These changes have been buried and have been completely overshadowed by other aspects of the budget,” Peacock said. “[They] are not taken seriously because they can’t take effect for many years [so] the public isn’t paying attention to that.” 

Smith said the budget proposal codifies changes the Legislature’s finance committee already approved in 2011 and 2012.

When the state has a better idea of how President Barack Obama’s health care law will be implemented, DHS would decide whether changes to the state’s Medicaid program like the one WCCF raised concerns about are needed. Such changes would need federal approval, she said.

Smith said the proposal was part of a larger push for “common-sense reforms” from DHS to make Medicaid coverage similar to private insurance, some of which the federal government has already approved. 

Those changes, which affected adults above 133 percent of the poverty level, included higher monthly premiums and requiring that they get employer-sponsored insurance if it is available, saving the state $28.1 million annually and leading to the first balanced Medicaid budget since 2007, Smith said.

Reporter Madeleine Behr contributed to this story.