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Scott Walker Refuses Federal Funding for Medicaid Expansion, Again

The state would stay the course and turn down federal money to expand Wisconsin's health programs for the needy, under Gov. Scott Walker's budget proposal.

By Jason Stein

The state would stay the course and turn down federal money to expand Wisconsin's health programs for the needy, under Gov. Scott Walker's budget proposal.

Also Monday, the Legislature's nonpartisan budget office reported that Walker is delaying May debt repayment of $108 million to help balance the state's shortfall in the current budget ending on June 30.

In 2013, the Republican governor rejected taking federal incentives to expand the state's Medicaid programs, saying the deal risked entangling the state in exponentially growing future costs.

Democrats say that Walker's approach means that state taxpayers today are paying more to cover fewer people in the BadgerCare Plus health plan.

At the heart of the issue lies the question of how Wisconsin should handle the federal Affordable Care Act, often called Obamacare, which sought to persuade states to add health coverage by promising to pay all of their short-term and most of their long-term costs to do so.

Walker has declined that offer, part of his strategy to limit the state's involvement in the Affordable Care Act, and his 2015-'17 budget proposal would continue that approach.

When it comes to BadgerCare, the stakes for Wisconsin are huge. It currently covers just over 800,000 people, a little more than half of them children, who depend on the program to pay for immunizations, medication to control chronic conditions like diabetes and even surgery.

But that comes with a cost. The state's overall Medicaid programs, which also serve nursing home patients and the disabled, will cost state taxpayers $4.78 billion over the current two-year budget, with federal taxpayers kicking in an even larger amount. Combining those long-term care programs with BadgerCare gives Medicaid more enrollees than any other health plan in Wisconsin.

Polling over the past year has shown Wisconsinites with a negative view of the Affordable Care Act. But that consistent disapproval doesn't necessarily extend to the Medicaid expansion.

An October 2013 Marquette University Law School poll found that 56% of registered voters backed using the federal money to expand Medicaid, while 36% opposed it. The law school hasn't polled on the issue since then.

Walker's approach expanded coverage through BadgerCare for the poorest adults in Wisconsin without coverage -- those making less than $23,850 a year for a family of four -- while dropping it for others making just above that amount.

As of last fall, BadgerCare had added about 97,500 adults without children who were below this cutoff of 100% of the federal poverty level, with state taxpayers covering a little more than 40% of the cost and federal money paying the rest. Meanwhile, the state has dropped about 57,000 adults from BadgerCare with incomes between 100% and 133% of the poverty level.

The governor said in 2013 that the great majority of those adults losing their BadgerCare would receive subsidized coverage by buying it on the private market or through an online federal marketplace created under the health care law. So far, only about one in three has done that.

Under Obamacare, federal taxpayers would have paid 100% of the cost for the adults that the state is bringing onto BadgerCare if Wisconsin hadn't dropped its coverage of the adults with somewhat higher incomes. The federal government's share eventually would drop to 90% of the cost.

The decision to reject that federal money is estimated to have a net cost to the state of more than $100 million in the current two-year budget. The extra federal money would have allowed the state to cover an estimated 84,700 more people through BadgerCare.

Walker and other Republicans dispute the idea that taking the federal money will save Wisconsin taxpayers money, arguing the nation's growing debt may prevent the federal government from paying in the future and the state could end up paying for the additional patients.

Democrats respond that Wisconsin could likely pull out of the Medicaid expansion if the federal government doesn't hold up its end of the deal, pointing to a memo prepared last year by the nonpartisan Wisconsin Legislative Council. These Walker critics note that some GOP governors in states such as Ohio, New Jersey, Michigan and Arizona accepted the Medicaid expansion.

(c)2015 the Milwaukee Journal Sentinel

Caroline Cournoyer is GOVERNING's senior web editor.
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