August 8, 2017
Perspective By Chris Rochester
MacIver Institute Communications Director
Legislative Democrats and the head of left-wing Citizen Action of Wisconsin are pushing a new scheme to get more people hooked on government benefits. Despite the abundance of lessons to be learned from the ongoing failure of government-run healthcare, they are proposing opening up BadgerCare - Wisconsin's health insurance program for the poor - to anyone willing to pay the monthly premium.
Wisconsin Democrats are serious about this. They even had the non-partisan Legislative Fiscal Bureau run an analysis on their plan - and then completely ignored the dire warnings they got back.
The Legislative Fiscal Bureau memo pointed out the reality that opening up BadgerCare Plus to anyone willing to pay the full premiums would do significant damage to the current program. To summarize LFB's warning: the more people on BadgerCare, the fewer providers will accept it because reimbursement rates from the government are so low. That means decreased access to health care for the state's most vulnerable populations.
"These [Medicaid] reimbursement rates are generally well below rates paid by commercial health care plans, which likely has the effect of restricting the number of medical providers who are willing to participate in the program, as well as the extent of their participation," warned Jon Dyck, LFB supervising analyst, in the June 2 memo.
In other words, Medicaid regularly stiffs healthcare providers by paying less than the full cost of services provided. Nationally, Medicaid pays only 52 cents for every dollar that private insurers pay. So if we push more of our citizens into BadgerCare, fewer doctors will accept BadgerCare patients because of the lousy reimbursement rate and access to health care will only get worse.
Dyck continued, "The expansion of the number of persons who receive coverage under the buy-in proposal could exacerbate provider access problems."
That didn't stop Sen. LaTonya Johnson (D-Milwaukee) and Rep. Eric Genrich (D-Milwaukee) from introducing the bill, AB 449, that lets anyone sign up for BadgerCare Plus as long as they're willing to pay an estimated $600 average premium.
Supporters of the bill insisted it will not result in any additional costs to the state at a press conference rolling out the ill-advised proposal. "This costs the government, the state of Wisconsin, nothing, no extra money," insisted Citizen Action of Wisconsin Executive Director Robert Kraig, who led the Democrats' press conference. "It's a simple bill with no fiscal impact whatsoever."
But the LFB went on to strongly hint that that's not true, either. The federal government sets requirements for provider access rates, which means the state could end up paying more for BadgerCare because of the 'public option.'
"It may be necessary to increase reimbursement payments in order to meet minimum provider access requirements under federal Medicaid regulations. Any such increase would increase the cost associated with providing coverage and also increase the amount of the premiums paid for coverage," wrote Dyck.
The concerns over BadgerCare For All's impact on health care access makes the question of how many people would actually sign up an important factor, but no one responding to questions at the 'public option' rollout knew how many people would be interested in enrolling.
"That's a super good question. I think the LFB didn't know, basically," Kraig said when a reporter asked him how many people they expected would buy into the program.
During the press conference unveiling the 'public option,' Genrich even seemed to contradict the LFB memo. "It would be more affordable and more comprehensive than most other plans, and it would be able to hold the cost of prescription drugs that continue to skyrocket," the Democrat said.
The LFB memo, on the other hand, states cost estimates "exclude the impact of prescription drug manufacturer rebates that the program receives, since the federal Medicaid law under which these rebates are paid would not be applicable to the proposed buy-in population."
Compounding the LFB's warning that expanding BadgerCare could reduce access to care and could end up costing taxpayers more money is evidence that Medicaid recipients don't actually have better health outcomes compared with people with no insurance at all.
A sprawling, now-infamous study in Oregon found that participation in Medicaid "generated no significant improvement in measured physical health outcomes," compared with people with no insurance at all, according to health care expert Avik Roy.
Medicaid's low reimbursement rates limit patients' access to care, which could explain why health outcomes didn't improve. The Oregon study also found that Medicaid enrollees visited the emergency room 40 percent more often than the uninsured.
There are also other notorious examples of the failures of government-run healthcare boondoggles like the scandal-plagued VA system, rationing of care in the UK (the Charlie Gard case comes to mind), and of course, Obamacare, which is devastating individual insurance markets across the country.
While long on vague, unsubstantiated claims about access to care and cost to taxpayers, the Democrats and Kraig did offer something unambiguous in their "BadgerCare For All" proposal: Obamacare isn't working and the cost of health care is still too high.
"Republicans I think offered some fairly cogent critiques of the affordability issues and access issues that are ongoing in this country," Genrich offered tepidly after Kraig explained that the motivation for the bill is the spiraling cost of health insurance in the Obamacare era.
Their solution - another big, open-ended government program to patch over the failures of another - is diametrically the wrong approach.
Reagan was right when he famously said, "The more the plans fail, the more the planners plan." BadgerCare For All is one plan that should go straight into the circular file.