The Medicaid expansion states are now beginning to come to terms with the reality of “free” federal money. #wiright #wipolitics Click To Tweet
MacIver News Service | Oct. 8, 2018
By M.D. Kittle
MADISON – Wisconsin’s left has hammered Republican Gov. Scott Walker for rejecting “free” federal Medicaid expansion money, pointing to what progressives see as the success of taxpayer money-grabbing states like Minnesota.
But, as usual, liberals have left out a few key details from their narrative. The inconvenient truth for progressives is that expanding Medicaid has been a costly proposition for taxpayers, costing some truly in need the medical benefits they could use.
Let’s do what MacIver News Service has long done: Check the spin.
Several news outlets have reported on Democratic gubernatorial candidate Tony Evers’ first campaign ad in which he blasted Walker, his opponent, for turning down “hundreds of millions of federal health care money that would have lowered the costs for our families.”
“Minnesota’s governor took the funds. They made changes. Wisconsin families pay nearly 50 percent more than Minnesotans for the same health care,” the ad, part of an initial six-figure messaging campaign, declared.
The assertion is false.
The Minnesota utopia fable, promoted by left-wing groups, fails to take into account how much taxpayer cash the Gopher State had to pump into the system to prop up Minnesota liberals’ full embrace of Obamacare and the Medicaid expansion.
Premiums headed into 2017 were expected to increase by a staggering 50-67 percent, as opposed to Wisconsin’s 16 percent hike. As a result, Minnesota was forced to come up with $300 million to bail out 123,000 struggling Minnesotans who did not qualify for federal Obamacare subsidies.
Minnesota was forced to come up with $300 million to bail out 123,000 struggling Minnesotans who did not qualify for federal Obamacare subsidies. Click To Tweet
The bloodletting of Minnesota taxpayers didn’t stop there. The following year, the Minnesota legislature spent an additional $542 million to establish a reinsurance program to hold down costs. Wisconsin recently enacted a similar reinsurance program, but the cost to state taxpayers is expected to be a fraction of that, about $34 million. Premiums are expected go down an average of 3.5 percent thanks to the program, which garnered federal approval earlier this year. Walker administration officials are confident the bill can be paid for by finding savings in the state’s behemoth Medicaid program.
Forget that, insist the Medicaid expansion pushers. What’s important is insuring the uninsured. Yet, after all that money, Minnesota’s rate of uninsured is 6 percent, compared to 7 percent in Wisconsin. Both states are below the national average.
It’s not just Minnesota.
No one likes to laud Ohio Gov. John Kasich for taking the Obamacare Medicaid expansion money more than John Kasich. And the outgoing Republican’s sometimes-friends on the left have applauded the failed presidential candidate for holding his hand out. He loves that applause.
In 2015, Kasich boasted to National Public Radio that he brought home the bacon, billions worth, in federal Medicaid money.
“It’s my money,” he said. “There’s no money in Washington. It’s my money. It’s the money of the people who live in my state.”
And it’s the money of Ohio’s neighbors and New York and California and Texas and Wisconsin and all the states. The liberal-led Medicaid expansion pulls taxpayer money from every corner of the country and redistributes it in the pockets of states that play by Obamacare’s rules.
What self-praising Kasich doesn’t like to mention is that Ohio and the 32 other states that took the Medicaid expansion money failed to estimate how many able-bodied adults living above previous poverty thresholds would take them up on government-funded health care.
As National Review reported in September 2017, Medicaid spending in Ohio skyrocketed 35 percent in four years – from $18.9 billion to $25.7 billion between fiscal year 2013 and 2017.
“Concerned about out-of-control costs, eventual federal funding cuts, and the expansion’s perverse incentive for states to cut services for the truly needy, Republicans in the (Ohio) General Assembly passed an enrollment freeze (last year). Kasich vetoed the freeze,” Jason Hart wrote in the National Review piece.
The Medicaid expansion states are now beginning to come to terms with the reality of “free” federal money. By 2020, they will have to cover 10 percent of the expansion. Peddlers of government money are a lot like pushers of illegal drugs. The first taste is always free. Then it’s going to cost you.
Oregon earlier this year approved a ballot question calling for higher taxes on hospitals and health insurance plans to cover the cost of expansion. Reality is hitting home. Some states have adopted or are considering Medicaid premiums, co-pays for emergency room visits, or work requirements for beneficiaries. Others have implemented higher taxes on cigarettes and alcohol, disproportionately hitting the poor that government-funded insurance is supposed to be helping.
And there’s one other consideration that Medicaid expansion advocates forget to mention. Studies, including an analysis funded in part by the Center for Poverty Research, suggest public insurance has been a substantial disincentive to work among low-income childless adults – a big part of the swell of new Medicaid recipients. The study looked at Wisconsin’s BadgerCare Plus Core Plan, launched in 2009, when the left controlled state government.
Among its key findings, the study noted that the receipt of public insurance in Wisconsin led to a 2.4 to 10.5 percentage point decline in quarterly employment rates among low-income childless adults for nine quarters following enrollment.
A 2015 Congressional Budget Office report estimated that by 2025, 4.8 million more people would be working had it not been for the Medicaid changes through Obamacare.
Wisconsin’s governor has often said that he did not want to subject the state and its taxpayers to the many strings – seen and unseen – attached to Medicaid expansion. Walker expressed concerns about the growing unfunded mandates Wisconsin would encounter. Given the fiscal and regulatory struggles expansion states have endured, it looks like conservative Walker was right to reject the federal government’s advances.