Scott Walker: The Only Governor to Expand Medicaid at State Taxpayers' Expense
By Guy Boulton
With its new two-year budget in place, Wisconsin now has passed up more than $550 million in federal money available under the Affordable Care Act.
The state previously rejected roughly $200 million in federal money available starting in January 2014, according to the Legislative Fiscal Bureau. The new budget turned away another $360 million -- far more than the $250 million in cuts the same budget made to the University of Wisconsin System.
Yet accepting the federal money was never seriously considered by the Republican-controlled Legislature. And that isn't surprising, given the state GOP's staunch opposition to the Affordable Care Act.
"It's become a signature issue for the party," said Charles Franklin, a professor of law and public policy at Marquette University.
The state instead has remained committed to Gov. Scott Walker's approach to the law.
Walker is the only governor in the country who has used the law to expand access to health insurance while turning down the additional federal dollars available to pay for it.
Most Republican governors have opted not to expand their Medicaid programs through the law. In contrast, Walker did expand Wisconsin's Medicaid program, and 145,000 people have gained coverage as a result.
The governor just did it in a way that costs state taxpayers -- though not federal taxpayers -- more money.
The Urban Institute, a generally liberal policy research organization, estimates that accepting the federal dollars available under the act would save $2.5 billion in state dollars from 2015 through 2024.
That estimate assumes that the federal money will remain available.
The Walker administration and others contend that the federal government eventually will reduce the money available to states through the law because of persistent U.S. budget deficits.
"If anyone thinks the federal government, which is currently $18 trillion in debt and cannot meet its current Medicaid obligations, will not renege on its future funding promises, they are not living in reality," Laurel Patrick, Walker's press secretary, said in an email.
There are other reasons for the GOP's steadfast opposition.
"Way too much of this is controlled by people in Washington," Assembly Speaker Robin Vos (R-Rochester) said.
At the same time, Wisconsin's rejection of more than a half billion dollars in federal money dismays supporters of the act.
"Federal money is often insecure, and for us to draw the line on this federal money is ridiculous," said Jon Peacock, research director of the Wisconsin Council on Children and Families, an advocacy group.
Peacock and others have noted that the state routinely accepts federal money for highways, education, housing, law enforcement and many other services.
"Fiscal logic is not driving the train here," he said. "Political calculations are."
Walker's approach has enabled him to maintain his opposition to the law, which -- when announcing his bid for the GOP presidential nomination -- he promised he would ask Congress to repeal on his first day in office.
His approach to the law also has been praised as both humane and politically shrewd.
Walker has stressed that Wisconsin now provides coverage for the truly poor while encouraging personal responsibility for people who are eligible for federal subsidies to buy private health plans sold on the marketplace set up through the law.
"It's very smart politics -- it does show his message well," Franklin said. "What he doesn't talk about is the money left on the table."
Walker had the flexibility to expand the Medicaid program while rejecting the federal money -- without significantly increasing state spending -- because Wisconsin already had broader eligibility for Medicaid than most other states did before the law was enacted.
That said, the cost has come in higher than projected because more people -- roughly 45,000 to 55,000 more -- signed up for BadgerCare Plus, the state's largest Medicaid program, than expected.
Explaining the governor's approach gets complicated. But the abbreviated version:
-- Adults below 100% of the federal poverty level -- $11,770 for an individual -- are eligible for BadgerCare Plus.
-- Adults in households with incomes above 100% of the federal poverty level, including an estimated 57,000 previously covered by BadgerCare Plus, can buy subsidized private health insurance on the marketplaces set up under the Affordable Care Act.
The Walker administration has said that people receive better coverage from private health plans. Those plans pay doctors and hospitals more for their services than Medicaid does. They also can provide better access to doctors because some health systems limit the number of Medicaid patients that their doctors can accept as patients.
Vos said this is one of the advantages of the governor's approach.
Other benefits include giving people a choice of health plans and relying more on the private market.
Other states have made the same arguments but are using the federal money to enable people to buy private health plans on the marketplaces.
For example, Iowa is expanding coverage in much the same way as Wisconsin -- only Iowa is using federal dollars to do it.
Arkansas and Indiana also are experimenting with ways to expand health insurance coverage while hewing more closely to conservative principles. Arkansas' approach, for instance, establishes health savings accounts that can be used for co-payments and co-insurance, while Indiana has installed a plan that it describes as promoting "value-based decision-making and personal health responsibility."
The approaches -- all a bit different and with different regulations -- are tailored to the different needs of the states and to their politics, said Robin Rudowitz, associate director for the Kaiser Commission on Medicaid and the Uninsured.
But Vos noted that states still must win federal approval for those sorts of different approaches, and he does not want the federal government to have that kind of control over Wisconsin's health care.
"There are options, but once again it still comes down to two basic problems," Vos said. "Number one, it still requires CMS (the Centers for Medicare and Medicaid Services) and the federal government to give us a waiver on a regular basis. It's not like once they give us a waiver we get to keep it. The next president could come in and take it all away."
"I am looking to some extent for Washington to give us a lot more flexibility that is not driven through CMS," Vos added. "Why not give us a block grant and say, 'Do what you feel is best for your state.'"
Accepting the federal money also would not necessarily save taxpayers money.
"We look at federal money as free money. It's not," said Mike Nichols, president of the Wisconsin Policy Research Institute, a policy research organization that supports free markets and limited government.
Perhaps for that reason, the Marquette Law School Poll found that 60% of those surveyed supported the state's taking the federal money.
But Franklin, who oversees the poll, said there would be a political price to pay among the Republican Party's base if the state were to change its position.
"There is no way on earth that this Legislature and the governor are going to change paths on Medicaid," Franklin said.
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