Hiding out at a secret location in Illinois, Wisconsin state Sen. Kathleen Vinehout ends every media interview with the same warning: Republican Gov. Scott Walker鈥檚 attack on public employee unions is overshadowing another part of his budget plan that could shred the state鈥檚 health care safety net.
The governor鈥檚 proposal, a 鈥溾�� bill that would strip most public employees of their collective bargaining rights, would also allow the Walker administration to make potentially drastic changes in health programs with little legislative oversight. Officials say it could help tackle a looming . But, the result, Vinehout predicts, is that 鈥渓arge numbers of people will lose ,鈥澛燼 component of Wisconsin鈥檚 Medicaid program.
Taking the lead in revamping health programs for the poor would be , Wisconsin鈥檚 new health secretary. A mild-mannered bureaucrat and head of the federal Medicaid program under President George W. Bush, he鈥檚 known within policy circles for staunchly conservative views and stinging critiques of President Barack Obama鈥檚 health care law.
Under Walker鈥檚 plan, Smith could reshape critical aspects of Wisconsin Medicaid and potentially strip tens of thousands of people from the rolls. He鈥檇 also be directed to ask the federal government for permission to go further.
In the process, Smith could chart a course for other Republican-led states seeking to reduce deficits by paring Medicaid. And he could emerge as a national leader in the right鈥檚 resistance to the new health law, an increasingly important issue in the lead-up to the 2012 elections.
Smith
Still, Smith faces some hurdles. The health law makes an additional for Medicaid, a joint state-federal program, beginning in 2014 and bans states from dumping most people who are now covered.
Nonetheless, an by the independent state Legislative Fiscal Bureau says Wisconsin could drop about 70,000 higher-earning adults from Medicaid without getting permission from Washington.
Smith is already edging into the national spotlight 聳 in part thanks to House Budget Committee Chairman Paul Ryan of Wisconsin. A day after Smith was confirmed as health secretary, he was called before the panel to testify on how the health law will hurt the state鈥檚 residents.
鈥淓xpanding Medicaid under the current framework doesn鈥檛 make sense,鈥� he told Kaiser Health News in late 2009 as the law was being debated. 鈥淵ou鈥檝e got to give states flexibility.鈥� (Smith couldn鈥檛 be reached for comment for this story.)
Just over a million people in Wisconsin are enrolled in Medicaid, at a cost of more than $6.5 billion in 2009, . That year, the federal government picked up almost 70 percent of the cost, but the share will decline when stimulus funds dry up this summer. Walker says Medicaid costs are at the root of half of the projected deficit.
Currently, most major Medicaid changes must be cleared by the full Wisconsin legislature. But, under Walker鈥檚 bill, Smith鈥檚 health department could make those changes through an emergency rule-making process without legislative approval. The Joint Committee on Finance would have 14 days to veto the changes. But critics say the new rules mean Smith and Walker wouldn鈥檛 have to present detailed plans to the public.
What Smith comes up with 鈥渕ay be brilliant,鈥� says David Reimer, a former state budget official who is now director of Community Advocates Public Policy Institute in Milwaukee. 鈥淚t may be awful. But we don鈥檛 know.鈥�
Smith, an Illinois native, was head of the federal Center for Medicaid and State Operations from 2001 to 2008. He also worked on Capitol Hill and ran Virginia鈥檚 Medicaid program. Before becoming Wisconsin鈥檚 health secretary, he was a senior fellow at the conservative Heritage Foundation and also , a consulting firm set up by Michael O. Leavitt, former secretary of the Department of Health and Human Services.
Leavitt says Smith left the consulting firm because 鈥渉e wanted to use his experience in a laboratory where his vision could be demonstrated. There鈥檚 no question that if he鈥檚 able to put it together and make it work, others will follow him.鈥�
Still, while it鈥檚 clear that Walker and Smith want to tackle Medicaid, the question is: What鈥檚 their plan? The budget bill outlines some likely changes, but also gives Smith leeway to make broader ones that aren鈥檛 yet clear.
In the past, Smith has consistently argued that Medicaid should focus only on the poorest people (Wisconsin covers individual adults earning nearly $22,000), and should rely on private managed-care programs to restrain costs. He also has promoted charging recipients higher co-pays to try to dissuade them from seeking unnecessary treatments.
Critics, such as Judith Solomon, an analyst with the liberal Center on Budget and Policy Priorities, say Smith has long advocated policies that could hurt the poor and undermine the intent of Medicaid. Opponents also cite a 2009 published by Heritage that seemed to advise states to drop out of Medicaid altogether.
But Robert Moffit, a senior fellow at Heritage who brought Smith to the think tank in 2008, says while 鈥渢here鈥檚 no question Smith is a real conservative,鈥� he鈥檚 thoughtful and open to new ideas.
As head of the federal Medicaid program, Smith issued a record number of waivers that allowed states to experiment聽鈥� including increasing the use of managed care and allowing states to find new ways to pay doctors and hospitals.
鈥淗ow many newly insured individuals gained health insurance under the Bush administration because of our waivers?鈥� Smith said in the 2009 interview. 鈥淚nstead of getting credit for that, we got criticism鈥� from liberals who wanted Washington to control the programs more tightly, he said.
The Obama administration is likely to resist the kind of changes Smith will likely want to make in Wisconsin. Though federal Medicaid officials would not specifically comment on Wisconsin, they indicated that the types of policies suggested in Walker鈥檚 bill聽鈥� such as barring people who are likely eligible for Medicaid from receiving services before being formally enrolled聽鈥� could pose problems.
But Leavitt, Smith鈥檚 old boss, says economic problems have become so severe that something has to give. 鈥淗ealth care policy has always been driven by human compassion,鈥� he says. 鈥淲e can鈥檛 lose it, but we are now dealing with a new factor.鈥�