Budget Blog: JFC Removes Medicaid Expansion

The Joint Committee on Finance (JFC) held its first executive hearing on the state budget last Thursday, May 6th. This is where the real work on the budget happens. The joint committee takes votes on every section of the budget over the course of several weeks. The final product will then go to the Assembly and Senate for approval. Then Gov. Evers will take out his line-item veto pen, and sign the final version into law.

JFC announced weeks ago that Gov. Evers’ budget proposal was unworkable, because it would require massive tax increases. When JFC sat down, the first thing it did was remove all the policy items from Evers’ proposal. That included an expansion of Medicaid that Democrats have been fight for since 2014. It would mean putting everyone on Medicaid (BadgerCare) who makes up to 138% of the Federal Poverty Line (FPL). The feds have tried offered big incentives hoping to make the expansion irresistible.

Republicans on JFC, however, say Wisconsin has managed to cover more people through private insurance than states that choose to expand. Democrats complain that it’s foolish for Wisconsin to do that without taking the federal funding, which comes out to $1.6 billion over the next two years. Republicans say that proves Democrats aren’t really interested in healthcare access, they’re only interested in money and getting people hooked on another government welfare program.

Expanding Medicaid would create second order effects as well. The non-partisan Legislative Fiscal bureau warned years ago that putting more people on Medicaid would create healthcare access problems. Because Medicaid pays low reimbursement rates to providers, providers are less likely to accept any Medicaid patients at all if there are too many of them. When Medicaid patients cannot receive healthcare in clinics, they tend to go to the emergency room, where care is more expensive, but can’t be refused. Providers then shift that cost onto other insurance carriers, which means higher premiums for everyone who’s not on Medicaid.

Not surprisingly, Republicans used these reasons to vote against the Medicaid expansion. It was defeated on a partisan 12-4 vote.

Afterwards, JFC introduced a substitute amendment to reset the budget’s spending levels to base. Finally, several non-controversial areas of the budget were approved in one quick motion.

JFC will meet next on Thursday, May 13th.