©Copyright 2004 All Rights Reserved Reinhart Boerner Van Deuren s.c. Wisconsin Taxation and...
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Transcript of ©Copyright 2004 All Rights Reserved Reinhart Boerner Van Deuren s.c. Wisconsin Taxation and...
©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin TaxationWisconsin Taxationand Spendingand Spending
LaFollette SchoolLaFollette SchoolJanuary 2005January 2005
ByThomas R. Hefty
Reinhart Boerner Van Deuren s.c.Retired Chairman and CEO
Wisconsin Blue Cross Blue ShieldW233 N2080 Ridgeview Parkway
2©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL SPENDINGTHE MISSING LINK
● AMONG WISCONSIN’S LARGEST AND FASTEST GROWING PROGRAMS● LARGEST FEDERALLY FUNDED STATE PROGRAM● COVERS OVER 14% OF WISCONSIN POPULATION
● 25% OF MILWAUKEE COUNTY AND NORTHERN COUNTIES● 8% OF DANE COUNTY● 5% OF METRO SUBURBS
3©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and Wisconsin Taxation and Spending--Medicaid GrowthSpending--Medicaid Growth
4©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
WHY IS STATE MEDICAID SPENDING GROWING
● HEALTH CARE COSTS
● NEW PROGRAMS
● BADGERCARE
● SENIOR CARE
● LIMITS ON FEDERAL AID
● EXTENSIVE RANGE OF SERVICES
5©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
MEDICAID RANGE OF SERVICES AND MEDICAID RANGE OF SERVICES AND EXPENDITURESEXPENDITURES
WIS. PER ENROLLEE$$
U.S. PER ENROLLEE$$
CHILDREN $1074 $1227
ADULTS $1283 $1625
ELDERLY $13942 $10026
BLIND & DISABLED $11280 $9956
TOTAL $4657 $3762
6©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
MEDICAID RANGE OF SERVICES AND MEDICAID RANGE OF SERVICES AND EXPENDITURESEXPENDITURES
PERCENTAGE OF MEDICAID SPENDING
WISCONSIN U.S.
CHILDREN 11% 16%
ADULTS 6% 10%
ELDERLY 38% 30%
BLIND AND DISABLED 45% 41%
OTHER -- 3%
TOTAL 100% 100%
7©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
WISCONSIN’S HEALTH CARE MARKET COMPARED TO NATIONAL AVERAGE
(NON-ELDERLY)1995-2000 2003
WIS. U.S. WIS. U.S.
PRIVATE COVERAGE 83.5% 72.3% 74.9% 67.9%
MEDICAID 7.9% 12.1% 11.8% 12.4%
UNINSURED 8.6% 15.5% 11.7% 17.5%
8©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID IS LARGEST CATEGORY OF FEDERAL AID TO WISCONSIN STATE GOVERNMENT
$$ PERCENT OF NATIONAL PER
CAPITA AVERAGE
TOTAL FEDERAL 5.6 BILLION 87%
MEDICAID $2.5 BILLION 79%
9©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
WISCONSIN RANKING IN FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
PER CAPITA $$ PERCENTAGE OF BUDGET
U.S. AVERAGE $1037 18.9%
WISCONSIN $943 (35TH) 16.5% (41ST)
MICHIGAN $1039 18.3%
IOWA $986 19.1%
MINNESOTA $969 15.4%
ILLINOIS $869 16.8%
10©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
EXCUSES FOR LOW FEDERAL FUNDING
• NO DEFENSE BASES• AVERSION TO PORK• BETTER GOVERNMENT• ALWAYS RANKED LOW
11©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
• HISTORICAL PERSPECTIVE• WISCONSIN DID MUCH BETTER IN FEDERAL
FUNDING IN THE MID-1980’S
PER CAPITA $$
PERCENTAGE OF STATE AND LOCAL SPENDING
U.S. AVERAGE $472 16.8%
WISCONSIN $502 (19TH) 17.3% (15TH)
12©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
FEDERAL FUNDS PERFORMANCE RANKING EXPLANATION
• FORMULA CRITERIA - CONGRESS
• EARMARKED FUNDS - CONGRESS
• STATE PROGRAM DESIGN - ADMIN/LEGISLATURE
• STATE PROGRAM ADMINISTRATION - AGENCIES
• COOPERATION OF LOCAL GOVERNMENT
• PRIVATE SECTOR PARTICIPATION
13©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
SOURCE OF MEDICAID FUNDING
FEDERAL STATE GENERAL
FUNDS
OTHER
U.S. AVG. 59% 33% 8%
WISCONSIN 62% 36.5% 1.5%
FMAP FORMULA BENEFITS WISCONSIN BECAUSE OF LOW AVERAGE INCOME
14©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL FUNDING OPPORTUNITIES AND LIMITATIONS
I. DISPROPORTIONATE SHARE (DSH)WISCONSIN FAILED TO PURSUE DSHNOW FROZEN BY CONGRESSIONAL ACTIONWISCONSIN AT MINIMUM PAYMENT LEVELDSH AS PERCENTAGE OF MEDICAID SPENDING
U.S. AVG. 6.4%WISCONSIN 1.2%MASSACHUSETTS 7.9%MISSOURI 9.9%
15©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL FUNDING OPPORTUNITIES AND LIMITATIONS (CONTINUED)
II. INTERGOVERNMENT TRANSFERS (IGT) AND UPPER PAYMENT LIMIT (UPL)
PHASED OUT BY FEDERAL RULE
WISCONSIN PURSUED IGT’S AGGRESSIVELY FOR NURSING HOMES AND MILWAUKEE COUNTY GENERAL ASSISTANCE MEDICAL RELIEF
ESTIMATED TOTAL UPL TRANSITION PAYMENTS TO WISCONSIN OF $1.1 BILLION (4% OF NATIONAL TOTAL) SOURCE. KAISER COMMISSION ON MEDICAID AND THE UNINSURED APRIL 2004
16©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL FUNDING OPPORTUNITIES AND LIMITATIONS (CONTINUED)
III. PROVIDER/HMO ASSESSMENTS
NURSING HOME ASSESSMENTS USED SINCE EARLY 1990’S
LEGISLATURE REJECTED SPECIAL HMO TAX IN 2003
FEDERAL RULES REQUIRE EQUITABLE TAXATION/BENEFITS
17©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL FUNDING OPPORTUNITIES AND LIMITATIONS (CONTINUED)
IV. SHIFTING STATE/LOCAL FUNDED HEALTH SERVICES INTO MEDICAID
OPPORTUNITIES REMAIN IN SCHOOLS, PRISON HEALTH, AND WELFARE REFORM SERVICES
18©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL FUNDING OPPORTUNITIES AND LIMITATIONS (CONTINUED)
V. SPECIFIC SAVINGS●SCHOOLS
ONLY ONE-HALF OF WISCONSIN SCHOOL DISTRICTS DIRECTLY BILL FOR MEDICAID
SERVICES●WELFARE REFORM
MEDICAID PROVIDES ONLY 0.1% OF WISCONSIN
FUNDING COMPARED TO 4.9% NATIONAL AVERAGE
19©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
STRATEGIC MEDICAID CHALLENGES
I. PROPOSALS TO CHANGE FMAP FORMULA● 2004 GAO STUDY USES WISCONSIN AS EXAMPLE OF OVERPAYMENT
II. SENIOR CARE IMPACT BY MEDICARE DRUG BENEFIT
III. BADGERCARE PRIVATE MARKET IMPACT● PROGRAM WAS INTEGRATED WITH MEDICAID – NOT PRIVATE MARKET COVERAGE
IV. PHASEOUT OF UPL PAYMENTS
V. ADMINISTRATION PROPOSAL TO CONVERT MATCHING FUNDS TO BLOCK GRANTS
20©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL SPENDING THE MISSING LINK-SUMMARY
OPPORTUNITY IF WISCONSIN MATCHED NATIONAL AVERAGE OF PERCENTAGE OF TOTAL SPENDING
STATE GOVERNMENT-ANNUAL IMPACTTOTAL FEDERAL AID TO WISCONSINSTATE GOVERNMENT $5.6 BILLION 23.6%
TOTAL FEDERAL AID TO WISCONSINSTATE GOVERNMENT AT NATIONAL
AVERAGE OF 29.6% $7.0 BILLION
SHORTFALL $1.4 BILLION
21©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL SPENDINGTHE MISSING LINK-SUMMARY
OPPORTUNITY IF WISCONSIN MATCHED TOTAL NATIONAL PER CAPITAFEDERAL AID
STATE AND LOCAL GOVERNMENTPER CAPITA SPENDING FROM FEDERAL SOURCES
WISCONSIN FEDERAL SPENDING $ 943
U.S. AVERAGE FEDERAL SPENDING $1037SHORTFALL $ 96 PER CAPITA
TOTAL $ 510 MILLION ANNUAL IMPACT
22©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL SPENDINGTHE MISSING LINK-SUMMARY
OPPORTUNITY IF WISCONSIN MATCHED THE NATIONAL PER CAPITA AVERAGE IN FEDERAL MEDICAID SPENDING
WISCONSIN FEDERAL MEDICAIDSPENDING PER CAPITA $357
U.S. AVERAGE FEDERAL MEDICAIDSPENDING PER CAPITA $453
SHORTFALL $ 96 PER CAPITA
TOTAL MEDICAID SHORTFALL $510 MILLION ANNUAL IMPACT
23©Copyright 2004 All Rights ReservedReinhart Boerner Van Deuren s.c.
Wisconsin Taxation and SpendingWisconsin Taxation and Spending
MEDICAID AND FEDERAL SPENDINGTHE MISSING LINK-SUMMARY
● MEDICAID IS THE LARGEST FEDERAL PAYMENT, THE LARGEST SHORTFALL, AND THE LARGEST OPPORTUNITY FOR BUDGET IMPACT
● IMPROVEMENT REQUIRES COOPERATION OF OTHER STATE AGENCIES AND LOCAL GOVERNMENTS
● WINNERS DESIGN IMPACT OF FEDERAL RECOVERIES INTO EVERY PROGRAM
● INCENTIVES FOR STATE EMPLOYEES, CONTRACTORS, AND LOCAL GOVERNMENTS