May 1, 2019
Special Guest Perspective by Dan O’Donnell
To hear Governor Evers tell it, expanding Medicaid in Wisconsin in his first biennial budget is an absolute necessity.
“We’re not going to give up on this,” he said during a recent town hall event. “Of course we always want to find common ground. We absolutely have to, but at the end of the day, I do have something that Republicans don’t have and that’s veto. I have the biggest veto pen in this country. It’s bigger than this room.”
Evers seems to think veto envy is motivating Republican opposition to his plan to expand Medicaid eligibility to 138% of the federal poverty line, but the actual reason is its utter redundancy.
In 2012, the U.S. Supreme Court struck down states’ mandatory participation in the Affordable Care Act’s Medicaid expansion, holding that it amounted to an unconstitutional federal takeover of state sovereignty in administering health coverage to low-income residents.
Of the more than 20 states that opted out, only Wisconsin experienced no “coverage gap”— wherein a state’s decision to decline federal Medicaid money led to no viable coverage options for low-income adults.
Former Governor Scott Walker decided to set Medicaid eligibility at 100% of the federal poverty line (an annual income below $12,490 for an individual and $25,750 for a family of four in 2019) and allow everyone above it to purchase coverage on the federal exchanges.
This hybrid approach has been incredibly effective.
“The premium costs for someone that is between $13,000 and $17,000 for a plan on the exchange – the Obamacare exchange – is 18 cents a month,” Republican State Representative John Nygren told MacIver News. “The deductible – the annual deductible for somebody on that plan is $50 a year. So, under any circumstances compared to private insurance you’re getting from your company – this is affordable. This is very affordable for someone of modest means.”
There is thus no need to expand Medicaid coverage since Wisconsinites living just above the poverty line are already eligible for what amounts to essentially no-cost coverage.
Moreover, the cost of expanding Medicaid would be astronomical.
The “free federal money” that Wisconsin has so far refused would cost the state upwards of $600 million per year since states are on the hook for 10% of the price of Medicaid expansion.
The Wisconsin Institute for Law and Liberty and Center for Research on the Wisconsin Economy found that much of this cost would be borne by those with private health insurance. On average, the cost of an individual plan would rise by $177 per year while a family of four could see a spike of up to $700.
Since Medicaid expansion would invariably push so many consumers off of private insurance plans and Medicaid reimbursement rates for health care providers are so much lower than those from private plans, providers will experience a dramatic uptick in cost, which they will pass on to consumers.
In addition, the massive influx of consumers into highly subsidized public plans would put a massive strain on Wisconsin’s health care system, with emergency room visits increasing by a staggering 52,000 per year.
The expansion, in other words, would collapse under its own weight.
Think that’s unlikely? It already happened in Wisconsin once before.
In 2008, then-Governor Jim Doyle dramatically expanded the state’s BadgerCare program to what he dubbed “BadgerCare Plus.” Just a few months later, so many people enrolled that it blew its budget. 21,000 people remained on the waiting list.
Doyle scrambled to sign a stopgap solution titled BadgerCare Plus Basic into law in May of 2010, but the damage was already done. Skyrocketing health care costs drove Wisconsin’s budget deficit to a stunning $3.6 billion.
Early the next year, that massive budget deficit prompted newly-inaugurated Governor Scott Walker to propose a “budget repair bill” that included a dramatic overhaul of collective bargaining by public employee unions. This bill, eventually codified as Act 10, has been the bane of Wisconsin Democrats ever since.
Now, however, history is repeating and Governor Evers wants to pick up where Governor Doyle left off. One wonders why he thinks the result would be any different.