Neighbors diverge on health care
Nora G. Hertel and James Nord
People in Wisconsin and Minnesota living just barely above the poverty line are about to see their health care fortunes change — in opposite directions.
Lisa Nerenhausen is one of those people.
Nerenhausen and her husband, who live in Appleton, will likely lose their Medicaid coverage when the state changes its eligibility standards in response to the Affordable Care Act.
“It’s stressful for us, who are just above the poverty level, to try to figure this out,” Nerenhausen said of the transition.
In Minnesota, Eleta Pierce’s fortunes are also changing. For years, she and her family have moved on and off MinnesotaCare as their income varied. But now, Pierce is looking forward to consistent Medicaid coverage without a premium, beginning Jan. 1.
“It helps ease your mind when you know that part of your life is covered,” Pierce said.
In Wisconsin, about 77,000 people — many who are parents or caregivers — are expected to lose Medicaid and will have to purchase coverage through the private exchanges. These include about 38,000 people between 101 percent and 133 percent of the federal poverty level, according to figures provided by the state.
Wisconsin will be adding about 83,000 adults to the Medicaid rolls by enrolling childless adults under the poverty level and dropping adults above it. That’s a net gain of about 6,000 people.
Minnesota will not drop any Medicaid enrollees and will add eligible children and parents plus an estimated 35,000 childless adults whose incomes fall between 75 and 133 percent of poverty.
The federal poverty level is $11,490 a year for an individual, $15,510 for a family of two and $23,550 a year for a family of four.
The Wisconsin changes mean some residents here will soon be required to pay for their coverage while Minnesotans in the same income brackets will be moving onto Medicaid for free or subsidized health care. The transition, originally planned for Jan. 1, has been pushed back to April 1.
For Nerenhausen and her family, the consequences are mixed. While she and her husband are likely losing coverage under BadgerCare, the state’s Medicaid program, their 21-year-old son will become newly eligible for coverage.
Different directions Currently, Wisconsin offers Medicaid coverage to a broader swath of the population than does Minnesota. Wisconsin’s Medicaid program, known as BadgerCare, covers adults up to 200 percent of the federal poverty level. But long waiting lists have meant that many eligible childless adults are not getting coverage at all.
Minnesota, meanwhile, had much lower coverage levels but was providing Medicaid to most of those who qualified. Minnesota has also been covering individuals above 200 percent of the poverty level on a program called MinnesotaCare, which charges some premiums and uses federal Medicaid and state funds. That level will drop to 200 percent of the federal poverty level next year. Other Medicaid recipients are covered by Medical Assistance, which uses state and federal funds.
Wisconsin’s governor, Republican Scott Walker, much to the dismay of state Democrats, decided to forgo $119 million in federal funds to expand Medicaid.
In an interview with the Wisconsin Center for Investigative Journalism, Walker said he tried to avoid the two routes taken by most states: accepting the federal expansion at the risk of a future expense to the state or rejecting the federal funds and leaving many residents uninsured.
“I disagreed with Obamacare. I have consistently been against it,” he said. “I tried to provide a viable alternative.”
But Walker delayed his plan to move some people off BadgerCare and allow others was put on hold because, he said, of the mess the Obama administration made of its health care roll-out.
“I’m not going to let the failure of the federal government let people fall through the cracks,” Walker said in announcing the delay.
‘Let’s do it’
In Minnesota, Democratic Gov. Mark Dayton moved quickly after taking office in January 2011 to expand Medicaid. He accepted federal funding to raise the state’s coverage threshold to 133 percent. The Minnesota Department of Human Services estimates 880,000 people will be in the program in 2015, as well as 145,000 MinnesotaCare enrollees.
The early Medicaid opt-in will attract $1.2 billion in federal aid to Minnesota through early 2014, said the Department of Human Services. Those funds represent the typical 50 percent federal Medicaid funding match. The funding, however, will bump up to 100 percent next year for newly eligible childless adults.
The full expansion of Medicaid, known as Medical Assistance in Minnesota, is expected to save the state about $117 million over the next two years.
“Minnesota’s doing the right thing and saying, ‘Look, the feds are paying us to give Medicaid coverage to guys below 133 (percent of poverty) — let’s do it,’” said Jonathan Gruber, an MIT economist who assisted planning for MNsure and helped design the Affordable Care Act.
Gruber said the Medicaid expansion also helps consumers who purchase private coverage through the exchanges. Typically, he said, those on Medicaid tend to be sicker, so forcing them to purchase private coverage will drive up premiums by 10 percent or more on the marketplaces because of the way insurers calculate costs.
Frustrated with the politics Nerenhausen’s family of five first enrolled for BadgerCare in 2003 when her husband, Brian Sorensen, was laid off from his job as custodial and maintenance supervisor with the city of Appleton. When he started working again, part time, his income remained low enough to maintain their eligibility. Their income remains between 101 and 133 percent of the poverty level.
Nerenhausen’s other two children, ages 18 and 15, will likely maintain BadgerCare coverage, but she and Sorensen will have to obtain coverage on the exchanges.
Sorensen suffers painful neuropathy — a consequence of successful treatments for neck cancer a few years ago. Even with BadgerCare and Social Security, the couple still has a hard time covering his medications and occasional hospital visits.
Nerenhausen is frustrated with the politics behind Wisconsin’s health care decisions. “We’re not just crying wolf, trying to get some sort of entitlements,” she said.
Eleta Pierce was kicked off of MinnesotaCare in August, and her children lost coverage in September when she could no longer pay the premiums. These events brought feelings of despair on Pierce.
“I know I teared up and cried, and just thought, ‘Here we go again,’” she said.
But that cycle may finally be broken. Pierce signed up on the MNsure exchange in October and learned she and her children are eligible for Medicaid without premiums. Now she and her boyfriend just have to get by until Jan. 1.
Higher costs in Wisconsin Premiums in Wisconsin’s marketplace, run by the federal government, are considerably higher than those on Minnesota’s MNsure market, report multiple analyses. The lowest-cost “silver tier” plan in Minnesota will cost an estimated $192 per month, according to averages calculated by the U.S. Department of Health and Human Services in September. The same level of coverage in Wisconsin is expected to cost an average of $344.
Progressive advocacy group Citizen Action of Wisconsin blames the premium gap between the states on policy decisions, including the rejection of federal funds for Medicaid expansion. But other experts contend the two states’ insurance markets have been different for decades, making for complicated comparisons.
Nerenhausen and her husband will likely qualify for subsidies on their monthly premiums, but she worries about an anticipated deductible in the thousands of dollars. Plus she feels confused about her current health care options. She is sorry to part with her BadgerCare coverage.
“It’s a good insurance plan,” Nerenhausen said. “It’s been there for us.”
Editor’s note: This story is a collaboration between the Wisconsin Center for Investigative Journalism and MinnPost. The project was supported by The Joyce Foundation.