As Congress considers spending cuts, Wisconsin Republicans argue against Medicaid expansion

Wisconsin’s top Republicans and a conservative policy group argue efforts by Congress to cut federal spending makes adopting Medicaid expansion a “costly gamble” for the state.

Medicaid is a public health insurance program for people with low incomes and those with disabilities. In Wisconsin, the joint federal and state program is called BadgerCare. The 2010 health care reform law, known as the Affordable Care Act or Obamacare, called for states to expand eligibility for Medicaid to nearly all adults with incomes up to 138 percent of the federal poverty line. Wisconsin Republicans have resisted the expansion since that law’s passage.

On Wednesday, the Wisconsin Institute for Law and Liberty released a report detailing the potential state cost of covering new recipients through Medicaid expansion under potential federal cuts to the program.

Democratic Gov. Tony Evers has continued to call for adopting the Affordable Care Act’s Medicaid expansion in his state budget proposals. The governor’s new two-year budget claims that expanding coverage would save the state $1.9 billion in Medicaid spending and lead to an additional $2.5 billion in federal funding over the two-year budget. That’s because under the ACA, the federal government reimburses states for 90 percent of the cost of the expansion.

WILL’s report argues these cost savings would turn into new state spending if Congress moves forward with a proposal to cut higher reimbursements for expansion states.

House Republicans have proposed ending the 90 percent federal match rate for adults covered through Medicaid expansion. It’s part of a larger effort to achieve $2 trillion in spending cuts in the budget resolution that passed Tuesday evening.

Using Medicaid spending data from national nonprofit KFF, the WILL report estimated that Wisconsin would be on the hook for $73 million in additional annual expenses if the reimbursement rate for newly eligible adults was cut from 90 percent to 60 percent, which is the national average.

The group also reported that any one-time federal funding received by the state for adopting expansion would be depleted in less than 16 years under the 60 percent reimbursement rate scenario. 

Speaking Wednesday at a state Capitol press conference with state Senate President Mary Felzkowski, R-Tomahawk, Republican Assembly Speaker Robin Vos pointed to the report as evidence that Wisconsin “made the right decision” by declining Medicaid expansion.

“Wisconsin has done a good thing in light of what’s happening with the federal government right now,” Vos told reporters. “You can be a Democrat or Republican, but everyone has to recognize the long-term fiscal stability for our nation is at risk because of the massive deficit that’s been run up under both Republicans and Democrats.”

He said state and federal lawmakers should be looking for ways to make the private health insurance market more competitive instead of increasing enrollment in public programs. Vos also claimed both federal and state lawmakers need to “root out the waste and inefficiencies” within the Medicaid system and voiced support for work requirements for adults without disabilities who receive coverage.

Wisconsin Republicans have long been opposed to ACA Medicaid expansion. During the tenure of Republican former Gov. Scott Walker, state lawmakers instead expanded eligibility for BadgerCare to include adults up to 100 percent of the federal poverty line. Individuals earning above that level are eligible for tax credits to help them purchase private coverage on the federal marketplace.

Evers has called for expanding BadgerCare in all four of his budget proposals as governor. During his budget address last week, Evers said expansion would help nearly 100,000 Wisconsin residents “get the health care they need without breaking the bank.”

“Health care should not be a privilege afforded only to the healthy and the wealthy,” Evers said during the address.