Medicaid Expansion Still Wrong for Wisconsin

October 5, 2015

by James Wigderson
Special Guest Perspective for the MacIver Institute

Governor Scott Walker is back, and this time it’s the Democrats’ turn to advise him on an agenda for the remainder of his term. Almost as if it was issue advocacy coordination waiting for Milwaukee DA John Chisholm to convene a John Doe investigation, Wisconsin Democratic legislators posed for photos with Citizen Action and called for Republicans to spend more taxpayer money on BadgerCare, the state’s Medicaid program.

Oh, pardonne moi, the politically correct term for taxpayer money is “enhanced federal funds,” according to Robert Kraig at Citizen Action. That must mean the money isn’t coming from the taxpayer but instead is being replicated by parthenogenesis made possible by genetically modifying the trees upon which money is grown. It might explain Milwaukee Journal Sentinel editor George Stanley’s odd obsession with leaves. Who says the federal government wastes money?

But until Kraig can produce evidence of federal money self-reproducing, I’m afraid we’ll have to assume that federal money still comes from two sources: the taxpayer, and borrowing. In the case of the latter, the taxpayer stills pays, and with interest.

According to the Legislative Fiscal Bureau, taxpayers will actually save up to $752 million through fiscal year 2017 because we turned down the so-called “enhanced federal funds.” So when Kraig and his Democratic Party allies, Senate Democratic Leader Jennifer Shilling, Assembly Democratic Leader Peter Barca, Sen. Janet Bewley, Rep. Daniel Riemer, Rep. Debra Kolste, Rep. Lisa Subeck, and Rep. JoCasta Zamarripa, lament the “loss” of $345 million in federal money to expand Medicaid spending, it’s not anymore of a loss than when you threw away that high interest “pre-approved” credit card application you received in the mail.

Not content to claim federal tax money is somehow free money, Kraig invented a health care coverage crisis. “Because of a purely political decision, tens of thousands of moderate income Wisconsinites are being needlessly denied affordable health coverage,” Kraig claimed.

Under the Obamacare Medicaid Expansion, if states increase enrollment eligibility to 138% of the federal poverty line, Obamacare will pay 100% of the cost of the increase through next year, and then the reimbursement rate will drop to 95% in 2017 and 90% in 2020. Because of the size of the national debt, there is a reasonable expectation that the state portion of the costs would actually grow. Current Medicaid reimbursement not covered by the expansion is currently at 58%.

However, instead of taking the federal money and committing Wisconsin to ever-expanding entitlement spending, Walker and the legislature chose another way. They expanded BadgerCare coverage to include everyone under the federal poverty line. For those above the federal poverty line, rather than put them in a Medicaid program, they could receive federal subsidies to purchase private insurance on the federal health care exchange.

In addition to keeping Medicaid costs down, enrollees in private insurance have better health outcomes and use the emergency room less. It also reduces the “cost sharing” that medical providers use to make up for the lower reimbursement rates from Medicaid, costs that are passed along to consumers of private insurance.

But more importantly, that means everyone in Wisconsin has access to affordable health care coverage. That’s not just a claim by the Walker Administration. That’s a claim by the Kaiser Foundation, and it shows Kraig is just being dishonest when he claims “tens of thousands of moderate income Wisconsinites” can’t get health coverage.

More importantly, Wisconsin avoids the financial hit other states have suffered when they have accepted the federal money. The Illinois Policy Institute reports the cost of Medicaid expansion will be $1.5 billion more than anticipated between 2017 and 2020. The Institute also notes that enrollment is much higher than anticipated. “Former Gov. Pat Quinn’s administration estimated just 342,000 able-bodied childless adults would ever sign up for the program. But by April 2015, actual Medicaid expansion enrollment had reached 633,671.”

In Ohio, Governor John Kasich underestimated the cost of Medicaid expansion by $1.5 billion in the first 18 months, according to Ohio Watchdog, using numbers from the Ohio Department of Medicaid. The cost of the Obamacare Medicaid expansion in just the first 18 months has been $4 billion in Ohio.

Wisconsinites are fortunate that taking the federal money and expanding Medicaid are not on the Republican legislative agenda. Compared to the states that are participating in the Obamacare Medicaid expansion, Wisconsin is actually saving money and making health care coverage accessible to everyone. This is one item to keep off the agenda for the remainder of Walker’s term.