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New Trump budget chief wrote Project 2025’s agenda for empowering the presidency

Donald Trump, at the time president of the United States, listens to then-Office of Management and Budget Acting Director Russ Vought deliver remarks prior to Trump signing executive orders on Oct. 9, 2019, in the Roosevelt Room of the White House. (Official White House Photo by Shealah Craighead)

WASHINGTON — Incoming White House budget director Russ Vought has spent much of his career learning the detailed, often convoluted mechanisms that make up the Office of Management and Budget.

The agency, little known outside Washington, D.C., is relatively small compared to the rest of the federal government, but it acts like a nucleus for the executive branch and holds significant power.

OMB is responsible for releasing the president’s budget request every year, but also manages much of the executive branch by overseeing departments’ performance, reviewing the vast majority of federal regulations and coordinating how the various agencies communicate with Congress. 

Vought was deputy director, acting director and then director at OMB during Trump’s first term.

Before that Vought worked as vice president of Heritage Action for America, policy director for the U.S. House Republican Conference, executive director of the Republican Study Committee and a legislative assistant for former Texas Republican Sen. Phil Gramm. He has an undergraduate degree from Wheaton College and a law degree from George Washington University Law School.

Following Trump’s first term in office, Vought founded the right-leaning Center for Renewing America. The group’s mission is “to renew a consensus of America as a nation under God with unique interests worthy of defending that flow from its people, institutions, and history, where individuals’ enjoyment of freedom is predicated on just laws and healthy communities.”

Cutting government spending

Vought outlined his agenda for the next four years in Project 2025, a 922-page document from the conservative-leaning Heritage Foundation that led to speculation during the presidential campaign about what Trump would seek to do without Congress, including in areas that constitutionally fall within the legislative branch, like government spending.

The Democratic presidential nominee, Vice President Kamala Harris, repeatedly tried to tie Project 2025 to Trump and his campaign, and they sought to distance themselves from its proposals. But Trump has since nominated some of its authors or contributors to run federal departments and agencies.

Vought, in a 26-page chapter on the executive office of the president, wrote the OMB director “must ensure the appointment of a General Counsel who is respected yet creative and fearless in his or her ability to challenge legal precedents that serve to protect the status quo.”

Trump, Vought and many others are bullish about cutting government spending, but will likely run into legal challenges if they try to spend more or considerably less than lawmakers approve in the dozen annual government funding bills. 

Budget request

One of Vought’s most visible responsibilities will be releasing the president’s annual budget request, a sweeping document that lays out the commander-in-chief’s proposal for the federal government’s tax and spending policy.

The president’s budget, however, is just a request since Congress has the constitutional authority to establish tax and spending policy.

Lawmakers on Capitol Hill write the dozen annual government funding bills that account for about one-third of annual federal spending. The rest of the federal government’s spending comes from Social Security, Medicare and Medicaid, which are classified as mandatory programs and mostly run on autopilot unless Congress approves changes and the president signs off on a new law.

That separation of powers led to frustration during Trump’s first term in office and will likely do so again, since he spoke during the 2024 campaign about using “impoundment” to prevent the federal government from spending money Congress has approved.

Trump withheld security assistance funding from Ukraine during his first term in office, leading to one of his two impeachments and a ruling from the Government Accountability Office —a nonpartisan government watchdog — that he had violated the law.

“Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law,” GAO wrote. “OMB withheld funds for a policy reason, which is not permitted under the Impoundment Control Act (ICA). The withholding was not a programmatic delay. Therefore, we conclude that OMB violated the ICA.”

Trump spoke on the campaign trail about using “impoundment” to drastically cut government spending, but that would likely lead to lawsuits and a Supreme Court ruling. 

Vought’s think tank, Center for Renewing America, published analysis of presidents using impoundment throughout the country’s history, with the authors concluding the Impoundment Control Act is unconstitutional.

‘Every possible tool’

Vought sought to defend the president’s budget request in his chapter in Project 2025, writing that though “some mistakenly regard it as a mere paper-pushing exercise, the President’s budget is in fact a powerful mechanism for setting and enforcing public policy at federal agencies.”

He signaled the second Trump administration would be more nuanced in its interpretation of presidential authority.

“The President should use every possible tool to propose and impose fiscal discipline on the federal government.” Vought wrote. “Anything short of that would constitute abject failure.”

Vought also wrote about the management aspect of OMB’s portfolio, pressing for political appointees to have more authority and influence than career staff.

“It is vital that the Director and his political staff, not the careerists, drive these offices in pursuit of the President’s actual priorities and not let them set their own agenda based on the wishes of the sprawling ‘good government’ management community in and outside of government,” Vought wrote. “Many Directors do not properly prioritize the management portfolio, leaving it to the Deputy for Management, but such neglect creates purposeless bureaucracy that impedes a President’s agenda—an ‘M Train to Nowhere.’”

Biden administration unveils plan to cover weight loss meds under Medicare, Medicaid

The Biden administration is proposing to cover drugs like Ozempic, which is used to treat heart disease, diabetes and obesity, under Medicare and Medicaid. (Photo illustration by Mario Tama/Getty Images)

WASHINGTON — The Biden administration announced Tuesday it’s reinterpreting federal law to allow Medicare and Medicaid patients access to anti-obesity medications to reduce their weight over the long term.

The Centers for Medicare and Medicaid’s proposed rule, which the Trump administration would need to finalize before it would take effect, is expected to cost $25 billion for Medicare combined with $11 billion in federal spending and $3.8 billion in state spending for Medicaid coverage throughout the next decade. 

CMS is encouraging states to submit comments to the proposed rule explaining when they could implement the Medicaid provision, since that health care program includes cost sharing between federal and state governments.

Medicare is the federal health insurance program for people 65 and older and some younger people with certain disabilities or conditions. Medicaid provides health care to some low-income individuals.

“People with obesity deserve to have affordable access to medical treatment and support, including anti-obesity medications for this disease; just as a person with type two diabetes can access these medications to get healthy,” CMS Administrator Chiquita Brooks-LaSure said on a call with reporters. “That’s why we’re proposing to revise our interpretation of the law and provide coverage of anti-obesity medications for the treatment of obesity.”

Brooks-LaSure said CMS was reinterpreting the law to view obesity as a chronic condition, which the agency believes provides a pathway for Medicare and Medicaid to cover anti-obesity medications.

“The medical community today agrees that obesity is a chronic disease,” Brooks-LaSure said. “It is a serious condition that increases the risk of premature death and can lead to other serious health issues, such as heart disease, stroke and diabetes.”

More than 40% of Americans have obesity and CMS data shows 22% of Medicare recipients were diagnosed with obesity during 2022, double the number from 10 years ago, she said.

CMS wrote in a fact sheet about the proposed rule that since creation of the Medicare Part D program, which provides prescription drug coverage, the agency has “interpreted the statutory exclusion of ‘agents when used for weight loss’ to mean that a drug, when used for weight loss, is excluded from the definition of a covered Part D drug.”

Trump and RFK Jr.

President-elect Donald Trump hadn’t commented on the proposal as of late Tuesday morning, but his planned nominee for Health and Human Services secretary, Robert F. Kennedy Jr., has repeatedly criticized newer weight loss drugs like Ozempic.

Kennedy was skeptical of studies showing the benefits of weight loss drugs during an appearance on Fox News last month, arguing the federal government would spend less money if it provided healthy meals to all Americans instead of coverage for weight loss drugs. 

“If we spent about one-fifth of that giving good food, three meals a day, to every man, woman and child in our country, we could solve the obesity and diabetes epidemic overnight,” Kennedy said.

CMS expects that about 3.4 million people in the Medicare program would become eligible for anti-obesity medication coverage under the proposed rule that would take effect in 2026 if Trump decides to finalize it.

Dan Tsai, CMS deputy administrator and director for the Center for Medicaid and CHIP Services, said during the call the agency hopes states submit comments in the weeks and months ahead detailing “when states would be required to implement this provision.”

“We note in the rule that the rule reinterprets the Medicaid statute, which means this would govern all Medicaid programs,” Tsai said. “But we specifically invite comment on a range of implications and timing for states.”

Cost differs in CBO report

The total cost of the program during the next decade that CMS provided on the call for Medicare was somewhat different from a cost estimate the Congressional Budget Office released last month. CBO is a government agency that provides nonpartisan budget information to Congress.

CBO projected it would cost the federal government $35 billion between 2026 and 2034 to cover anti-obesity medications for Medicare patients.

“Relative to the direct costs of the medications, total savings from beneficiaries’ improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034,” CBO wrote in the analysis.

The report explained that Medicare currently covers “some obesity-related services, including screening, behavioral counseling, and bariatric surgery (a procedure performed on the stomach or intestines to induce weight loss).”

While Medicare does cover anti-obesity medications for recipients with diabetes or cardiovascular disease, CBO wrote, Medicare “is prohibited by law from covering medications for weight management as part of the standard prescription drug benefit.”

The CBO report didn’t include a cost estimate for Medicaid, but noted that weight management drug coverage within that program is optional.

“According to one study, of the 47 states with publicly available lists of preferred drugs, nine had Medicaid programs that covered Wegovy in the first quarter of 2023.”

The National Governors Association and National Conference of State Legislatures both declined to comment on the proposed rule and its effect on state Medicaid programs.

 

Medicaid covers 1.2 million in Wisconsin. The election will determine its future

A patient lies down in a dentist room with a male dentist and a female assistant seated. Looking on with her back to the camera is a woman in a blue dress and white head covering.
Reading Time: 6 minutes
Click here to read highlights from the story
  • Wisconsin is home to more than 1.2 million Medicaid recipients and an estimated 310,000 people who lack insurance.  
  • Former President Donald Trump and Vice President Kamala Harris have said little about Medicaid policy on the campaign trail, but their records paint drastically different possibilities for the program after the election.  
  • Trump’s earlier administration increased scrutiny over eligibility for recipients, allowed states to add work requirements and proposed trimming around $1 trillion over 10 years from the federal Medicaid budget — cuts that Congress did not pass in 2017.
  • Harris in 2019 cosponsored the failed “Medicare for All” bill, which would have granted Americans universal coverage to replace private-pay insurance and Medicaid. She has since distanced herself from the proposal and touted record-high coverage levels during her administration with President Joe Biden.
Listen to Addie Costello’s story from WPR.

A family stood outside the doors of St. Francis Community Free Clinic at 4:55 p.m. on a recent Monday, five minutes before it was set to open. 

A volunteer receptionist switched on the Oshkosh, Wisconsin, clinic’s “open” sign and welcomed them inside. Within minutes, more patients filed into the waiting room. Volunteers called people back to see Dr. Weston Radford on a first-come, first-served basis.

The clinic technically closes at 7 p.m. on Mondays, but Radford, who volunteers here weekly, said he often stays to treat patients past 8 p.m. — 14 hours after starting his workday as an internal medicine doctor at a private clinic nearby. 

Still the free clinic in its limited hours can’t reach everyone who needs it, including many who lack adequate health insurance.   

“Health care is still a big need that we’re not really filling,” Radford said. 

Health care is on the minds of plenty of Wisconsin residents ahead of the November election. 

More than two dozen people who responded to WPR’s America Amplified project said they want politicians to prioritize health care access. Eight called for expanding access to Medicaid, the joint state and federal aid program to help low-income residents afford care.

Wisconsin is home to more than 1.2 million Medicaid recipients and an estimated 310,000 people who lack insurance.  

Voters weighing their options for president have heard little from former President Donald Trump, a Republican, or Vice President Kamala Harris, a Democrat, about Medicaid policy. Still, their past records and party affiliations paint drastically different possibilities for the program after November, according to the health policy research firm KFF.

“Medicaid and its future, whether it faces existential threats, will depend on the outcome of this fall’s federal election,” said Edwin Park, a public policy professor at Georgetown University.

Trump previously pushed Medicaid cuts 

Residents could lose Medicaid access, experts say, if Trump as president successfully revives his past proposals to shrink the size of the program — leaving more low-income adults reliant on busy clinics like St. Francis.

Project 2025, a plan for a second Trump administration published by the far-right Heritage Foundation, including chapters written by former Trump administration officials, proposes major cuts to federal Medicaid spending and toughened eligibility requirements. 

Those proposals align with Trump’s track record. His administration increased scrutiny over eligibility for recipients, allowed states to add work requirements and proposed trimming around $1 trillion over 10 years from the federal Medicaid budget — cuts that Congress did not pass in 2017.

Nevertheless, Trump has tried to distance himself from Project 2025.    

Donald Trump talks into a microphone with his hands out above a sign that says "TEXT WISCONSIN TO 88022"
Residents could lose Medicaid access, experts say, if former President Donald Trump returns to office and successfully revives his past proposals to shrink the program. He is shown at a campaign rally at the Waukesha County Expo Center in Waukesha, Wis., on May 1, 2024. (Jeffrey Phelps for Wisconsin Watch)

“Only President Trump and the campaign, and NOT any other organization or former staff, represent policies for the second term,” Danielle Alvarez, a senior adviser for Trump’s campaign, wrote in a statement to WPR and Wisconsin Watch.

The campaign did not respond to questions about whether Trump supports Project 2025 proposals to limit state Medicaid funding through block grants and impose lifetime limits on benefits. 

“President Donald J. Trump is unwavering in his mission to lower costs for seniors and protect Social Security, Medicare, and Medicaid,” Jacob Fischer, a Wisconsin spokesperson for Trump’s campaign, told WPR and Wisconsin Watch.

A 16-page Trump policy plan promises protections for Medicare, the government health coverage for seniors and adults with disabilities, but never mentions Medicaid.

Harris touts high Medicaid enrollment with few specifics

Meanwhile, an 82-page Harris campaign document touts record-high coverage levels during her administration with President Joe Biden, but it doesn’t articulate specific Medicaid policies. 

A Harris campaign spokesperson did not directly answer when asked about specific Medicaid proposals.   

“Donald Trump is campaigning on a promise to repeal the Affordable Care Act and would spike costs under his extreme Project 2025 agenda, a stark contrast from Vice President Kamala Harris’ plan to take on Big Pharma and bring down health care costs for families across Wisconsin,” Brianna Johnson, the campaign’s Wisconsin spokesperson, responded via email.

Kamala Harris smiles while standing behind a podium with two microphones and a presidential seal and her hands clasped.
An 82-page campaign document touts record-high coverage levels during Vice President Kamala Harris’ administration, but it doesn’t articulate specific Medicaid policies she would advance as president. Harris is shown at a campaign rally on Sept. 20, 2024, at the Veterans Memorial Coliseum within the Alliant Energy Center in Madison, Wis. (Joe Timmerman / Wisconsin Watch)

Harris pushed a more dramatic health care overhaul in 2019 while running in the Democratic presidential primary. She cosponsored the failed “Medicare for All” bill, which would have granted Americans universal coverage to replace private-pay insurance and Medicaid. 

Harris has since sought to distance herself from Medicare for All. Trump has attacked Harris for having “flip flopped” on what his campaign calls a “socialist” proposal, and he has spread misleading claims about what it would have meant for immigrants who entered the country illegally. 

Harris does not mention Medicare for All in her current platform. She instead describes plans to bolster Medicare and the Affordable Care Act, commonly known as “Obamacare” — a law Trump has repeatedly pushed to repeal. 

What does Medicaid policy mean for Wisconsin?

Wisconsin has a smaller proportion of uninsured residents than most states, but it remains among just 10 that haven’t expanded Medicaid to cover adults below 138% of the federal poverty line, around $20,800 a year for a single adult. 

Adopting expansion would allow Wisconsin to extend government coverage to up to 90,900 additional adults and reap a net benefit of $1.7 billion over two years, according to a Wisconsin Policy Forum estimate. 

Trump’s Affordable Care Act repeal efforts would have ended Medicaid expansion nationwide. The federal government can’t force states to expand coverage, but Congress during the Biden-Harris administration approved financial incentives to encourage expansion.

Wisconsin’s Republican-led Legislature rejected the most recent expansion proposal. Legislators have argued it would cause more residents to overly rely on the government, increase private insurance costs and burden future taxpayers.

Republican expansion critics point out that of the states that haven’t expanded Medicaid, Wisconsin is the only one without what some call a coverage gap. 

That’s because the state’s Medicaid program covers low-income adults making up to the federal poverty level — the same point at which they qualify for subsidized plans on the federal Health Insurance Marketplace.

But Medicaid is seen as more comprehensive coverage than Marketplace options. Wisconsin’s Medicaid program covers dental care. But a Marketplace enrollee may need to pay an extra premium for dental coverage.

Two-thirds of respondents in a KFF poll of non-expansion states, including Wisconsin, said they favored expansion.

While voters in six Republican-led states approved Medicaid expansion through ballot initiatives since 2020, Wisconsin voters lack the ability to put referendums on the ballot.

Some experts see Wisconsin’s new electoral maps as a potential path for expansion.

This is the first election after the Wisconsin Supreme Court ordered lawmakers to draw new state Assembly and Senate district boundaries. The new maps create the possibility of Democrats gaining a majority in the state Assembly due to more competitive districts. 

While a Democrat-led Senate remains unlikely, control over one chamber could still move expansion debates forward, said Philip Rocco, an associate professor of political science at Marquette University.

“Even if there’s not a victory immediately, it might create some political momentum for one to happen eventually,” Rocco said.

Outside view of St. Francis Clinic building
St. Francis Community Free Clinic in Oshkosh, Wis., serves patients who lack adequate private insurance, are in between coverage or can’t qualify for Medicaid because of their citizenship status. (Courtesy of St. Francis Community Free Clinic)

Radford isn’t sure why Wisconsin hasn’t expanded Medicaid, but he remains hopeful.

It would ease some of his work at his day job at the private clinic. Having more people on Medicare or Medicaid could decrease worries about denials or big out-of-pocket costs.

“It’d be nice just to be able to treat the people what we think medically is the best for them,” Radford said.

Even under expansion, plenty of Wisconsin residents will still need to visit free clinics like St. Francis. 

‘We just take care of them’ 

Each week Radford sees patients who lack adequate private insurance, are in between coverage or can’t qualify for Medicaid because of their citizenship status.

Such needs aren’t new. Radford’s dad volunteered at St. Francis for around 30 years, spanning several  presidential administrations.

While health care policies have changed over time, the clinic’s mission hasn’t. No one at the front desk asks questions about insurance or other types of payment. No one gets turned away.

“People got to be seen,” Radford said. “So we just take care of them.”

Wisconsin Watch is a nonprofit, nonpartisan newsroom. Subscribe to our newsletters for original stories and our Friday news roundup.

Medicaid covers 1.2 million in Wisconsin. The election will determine its future is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Wisconsin’s long-term care crisis: Staffing troubles, low Medicaid rates prompt closures

A woman drinks from a cup at a table in the foreground as others work in a kitchen in the background.
Reading Time: 7 minutes
Click here to read highlights from the story
  • Assisted living has grown in popularity across Wisconsin and the country, offering aging residents and people with disabilities more independence in less institutionalized settings than traditional nursing homes.
  • Low state reimbursement rates through Medicaid have depressed provider revenue and worker pay, causing some facilities to oust residents who rely on Medicaid or even close.
  • Providers say Gov. Tony Evers’ $258 million plan to invest federal pandemic relief funds will help. But more is needed to maintain options for older people and those with disabilities.
Listen to Addie Costello’s story from WPR.

Barbara Hendricks needs at least 10 residents to pay out of pocket for her 22-bed assisted living facility in Horicon, Wisconsin, to survive.

That’s because the other residents in the Dodge County home, Marvin’s Manor, rely solely on Medicaid, which Hendricks said pays her a little more than half the private-pay rate she charges — far below the cost of paying her workers.

“We will just make it,” Hendricks said.

Squeezing by required Hendricks to close the other assisted living facility she ran in Waupun. The decision to close by August left the city with no assisted living providers for seniors who rely on government funding after exhausting their savings. The facility sits empty after the closure forced 12 residents to find new homes, an increasingly difficult task for seniors already on Medicaid, the joint state and federal aid program to help low-income residents afford care.

“Going to see the residents now you can see they’re sad. They’re not home,” Hendricks said. “They’re just not home.”

A woman in a colorful dress and glasses with a tattoo on her right arm stands in front of a table next to another woman in a light blue coat and white shirt.
Barbara Hendricks, owner of Marvin’s Manor, an assisted living facility, stands to the left of her assistant Terri Uherka on Aug. 15, 2024, in Horicon, Wis. Hendricks previously owned an assisted living facility in Waupun. It closed in August due to budget pressures. (Joe Timmerman / Wisconsin Watch)

Assisted living has grown in popularity across Wisconsin and the country, offering aging residents and people with disabilities more independence in less institutionalized settings than traditional nursing homes. But providers continue to struggle. Low state reimbursement rates through Medicaid have depressed provider revenue and worker pay.

That has led some facilities to oust residents who rely on government assistance or even close, limiting options for residents in need. 

In 2023 alone, 148 Wisconsin assisted living communities closed voluntarily, according to the Wisconsin Department of Health Services.

WPR and Wisconsin Watch obtained reports from 86 assisted living facilities that closed between 2020 and the first half of 2024, displacing more than 750 people. Each report asks providers to list their reasons for closure. About two-thirds blamed low Medicaid reimbursements or staffing shortages.

A Jefferson County provider cited “the historic and compounding gap between government long-term care provider reimbursement rates and the costs associated with providing care — in particular wages” as the biggest factor in its deficit.

The owner of a shuttered Green County facility wrote simply: “NO STAFF TO WORK.”

The state has incrementally boosted Medicaid reimbursement rates to cover assisted living and home health care, but not every provider benefited, and the rates continue to lag behind the cost of care.  

Democratic Gov. Tony Evers in August directed the state health department to spend more than $250 million in federal pandemic relief on assisted living. That was after the Republican-led Legislature’s budget writing committee blocked an earlier plan in an ongoing struggle over spending power.  

Long-term care experts say Evers’ action will help, but only temporarily, and it still falls short of the full cost of care. 

The emergency dollars must be spent by June 2025.

The Legislature will then decide whether to keep the funding in the state’s two-year budget. Republican leaders have previously called the rate increases too expensive. 

“I don’t think (state officials) understand it,” Hendricks said. “They don’t see it. They don’t live it. We do.”

A woman wearing glasses on the left smiles and stands on a sidewalk next to a woman in a pink shirt.
Rosa Landa, owner of Good Hand Care AFH assisted living facility, left, laughs with resident Bebette Gaus upon finishing a walk around the neighborhood on Aug. 23, 2024, in Madison, Wis. (Joe Timmerman / Wisconsin Watch)

Providers seek relief

Wisconsin since 2020 has increased its average monthly Medicaid payments by roughly $790 per care recipient. But not every provider has seen recent raises.

Reimbursement rates for some of Hendricks’ residents haven’t budged in five years, said her daughter Tonya Maldonado, who handles billing for the company. 

How is that possible? Managed care.

The state doesn’t reimburse providers directly. It pays managed care organizations, which negotiate rates with providers, aiming to limit costs. Wisconsin’s four MCOs later pay providers.

Managed care systems intend to provide higher value care to Medicaid recipients for less money, said Vincent Pohl, a senior researcher at Mathematica, a social policy research firm.

Managed care companies want to keep their costs low and maximize profits by passing as little Medicaid funding to providers as possible, Pohl said. They are navigating tough economics themselves, and historically low state reimbursement rates have left them little room to pass more money to providers, said Rene Eastman, vice president of financial and regulatory services at LeadingAge Wisconsin. 

A dining room is decorated with American flags.
The dining room inside Marvin’s Manor, an assisted living facility in Horicon, Wis., is shown on Aug. 15, 2024. (Joe Timmerman / Wisconsin Watch)

The state has little say over how much MCOs pay providers for assisted living.

“Under federal rules, there are very few ways in which the department can direct a managed care organization to spend its money,” said Wisconsin Medicaid Director Bill Hanna.

But the state can set minimum Medicaid reimbursement rates for MCOs to send providers, Hanna said. It has done so for nursing homes and other forms of medical care, but assisted living facilities have long lacked such assurance. 

Evers’ pandemic relief plan sets aside $258 million to increase Medicaid reimbursements. Unlike previous increases, it guarantees minimum payments to providers.

Nearly two-thirds of assisted living providers will see a more than 40% increase to their reimbursement rates, the Department of Health Services estimates. Three-fourths of supportive home care services would see a more than 16% increase, showing that most providers are currently getting less from MCOs.

Hanna said some providers see the plan as a lifeline. 

“I got phone calls the day of the announcement, from providers who called and said, ‘We were about to tell our board we needed to start closing procedures, but because of the minimum fee, we’re able to stay open,’” he said.

A pillow on a wicker couch says "Love's Labor Is Not Lost."
Pillows and flowers decorate the sunroom at Marvin’s Manor, an assisted living facility in Horicon, Wis., on Aug. 15, 2024. (Joe Timmerman / Wisconsin Watch)

Susan Osteen, president and CEO of Diverse Options in Fond du Lac County, hasn’t yet felt relief. 

“Whenever the state does something like this, we always just wait and see what’s coming next,” Osteen said. “And I don’t know what that’s going to mean for us.”

Diverse Options operates three four-bed assisted living homes for adults with developmental disabilities. The company closed an eight-bed facility in 2022 due to staffing issues.

Osteen says she’s waiting to see where the state sets minimum rates.

A reimbursement hike previously blocked by lawmakers would have required MCOs to reimburse providers at a $15.75 hourly wage for caregivers, up from the current $13.02 per hour. Britt Cudaback, an Evers spokesperson, said the governor’s latest proposal matched the previous plan. 

The hike would still fall short of the $18 to $22 per hour wages Osteen pays employees.

Meanwhile, some providers worry the minimum reimbursement rates will become ceilings in practice — with no motivation for MCOs to pay more competitive rates, said Janet Zander, advocacy and public policy coordinator with the Greater Wisconsin Agency on Aging Resources, Inc.

“Even those that are lifted, will they be lifted high enough to truly change the course that we’re experiencing now?” Zander asked.

Little room for error

Rosa Landa bought her first assisted living home in 2019, starting with just two residents in the Madison facility. With particularly low Medicaid reimbursement rates at the time, she dipped into her own savings to keep the home running — even before she had additional staff to pay. 

She considered closing Good Hand Care AFH before a slight Medicaid reimbursement hike allowed the home to survive and higher demands filled all four of its rooms.

Landa and her family take on most of the work alongside two employees. Their business turns a modest profit, but still-low Medicaid reimbursement rates offer little wiggle room.  

She and her husband opened a new home in Monona at the start of this year. So far, the new home only has one resident, leaving three of its four rooms sitting empty. Although more residents plan to move into the home soon, Landa can’t help worrying.

“I cannot breathe basically, until I see everybody in the house,” said Landa, who hadn’t heard about Evers’ $258 million plan.

A woman in glasses at left looks down at a book with another woman in pink at right.
Rosa Landa, owner of Good Hand Care AFH assisted living facility, left, reads a book with Bebette Gaus on Aug. 23, 2024, in Madison, Wis. Gaus has lived at the facility for three years. (Joe Timmerman / Wisconsin Watch)

The state health department will hold a webinar for providers in a month or two, Hanna said, and it will implement new rates by Oct. 1. All providers should start benefiting from the new rates by early 2025. 

But the change could be short-lived.

Continuing the higher rates after June would cost the state and federal governments an estimated $516 million over two years, adding to Wisconsin’s roughly $30 billion biennial Medicaid budget. The Department of Health Services will request the increase in the next budget cycle. 

While the department can set minimum rates on its own, the Legislature controls the funding to make it viable. 

A member of the Republican-controlled Joint Committee on Finance blocked the minimum rate from implementation in April. Committee leaders say they worry about the annual cost of maintaining higher rates once pandemic relief runs out.

“Just nine months ago, the Joint Committee on Finance approved nearly half a billion dollars in new money to support the long-term care industry in our state, bringing our total new investment in the past three budgets to well over a billion dollars,” committee co-chair Rep. Mark Born, R-Beaver Dam, wrote in a statement.

The state allocated more than half of new long-term care investments to nursing homes rather than assisted living facilities or at-home care, according to a WPR and Wisconsin Watch analysis of the past three state budgets.

But more than 90% of Wisconsin Medicaid recipients received long-term care outside of nursing homes or other institutional settings, according to an analysis of 2020 data by KFF, a health policy research firm.

It’ll be hard on the providers if the Legislature does not extend the rate increases from Evers’ plan —  especially for those who raise employee wages with the extra funding, Eastman of LeadingAge Wisconsin said.

“Once a caregiver wage is increased it’s extremely difficult and morally impossible to take that away,” Eastman said. “Providers need to be reassured that higher reimbursement will continue so that they can continue to pay their employees a fair and living wage.”

Jack Kelly of Wisconsin Watch contributed reporting. This story was co-published with WPR and Isthmus, an independent, local news source based in Madison.

Wisconsin Watch is a nonprofit, nonpartisan newsroom. Subscribe to our newsletters for original stories and our Friday news roundup.

Wisconsin’s long-term care crisis: Staffing troubles, low Medicaid rates prompt closures is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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