Matt Pommer: Scott Walker’s Medicaid decision costs state real money

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Matt Pommer
Tuesday, August 26, 2014

About 130,000 low-income adults who have no children have signed up for Wisconsin’s Medicaid program, creating controversy for Gov. Scott Walker. That’s about 30,000 more than were expected.

Last year, Walker, with the consent of the Republican-controlled Legislature, rejected a full expansion of Medicaid offered under the Affordable Health Care Act (“Obamacare”). Newly covered recipients would have been fully funded by the feds through the 2016 fiscal year, declining to 90 percent by 2020 and thereafter.

Walker’s alternative was a mixed bag, changing who is covered in Wisconsin and eligibility rules. All adults with incomes at or below the federal poverty guidelines would be covered, but coverage of adults in families between 100 percent and 200 percent of the poverty guidelines was eliminated.

Under Walker’s shift, the federal government is providing only 59 percent rather than 100 percent of the Medicaid cost for the newly eligible recipients. State taxpayers are picking up the difference. Initially budget experts expected the cost to state taxpayers to be $119 million for the current biennium. New budget figures have raised the cost to $206 million. The projected difference for 2015-2017 would grow to $261 million.

 The federal government would have provided an additional $561 million if Walker had adopted a full expansion of Medicaid. In addition to the $206 million in this biennium, total Medicaid expansion would have resulted in a net increase of $355 million to pay for health care in Wisconsin.

“In the business world, CEOs get fired for decisions like that,” said Democratic gubernatorial candidate Mary Burke.

Walker and Republicans are scrambling to respond to criticism for their stand against Medicaid expansion in Wisconsin. The governor says he is protecting state taxpayers by rejecting the additional federal money because the federal deficit is so high it might halt its share.

“We believe confidently going forward the federal government is likely to renege on its promises on Medicaid to the states,” the governor explained. Perhaps Walker is counting on Republicans winning the presidency in 2016.

Wisconsin need not fear for the future. The U.S. Center for Medicare and Medicaid has been asked whether a state could opt out of full expansion of Medicaid. It replied: “Yes, a state may choose whether and when to expand, and if a state covers the expansion group, it may decide to drop the coverage.”

Another answer comes from state Sen. Alberta Darling, R-River Hills, co-chair of the Legislature’s budget-writing Join Finance Committee.

“There is no such thing as free federal money. It’s all taxpayer funded. We all pay for it, and when—not if—the federal government can’t deliver on their bribe, real people lose coverage or have their choices limited,” Darling said.

That seems to say the way to prevent some future cutback is not to offer it in the first place. But there may be a deeper motive for the Medicaid decision. Walker has argued that it is best to reform the way the working poor get help. Last year the nonpartisan Legislative Fiscal Bureau summarized it:

“The administration maintains that switching theses adults from a public-entitlement program will encourage greater personal responsibility as these individuals would select their own coverage, pay regular premiums and have a personal financial stake in the level of health care services they utilize.”

The working poor tend to skew Democratic in their vote pattern. But $206 million—the potential savings—could be used for rural schools, less highway borrowing or even a cut in the top state income tax rate. Those things might interest more than just the working poor at election time.

The higher estimates seem to reflect what the late U.S. Sen. Everett Dirksen meant when he quipped: “A billion here, a billion there, pretty soon, you’re talking real money.”

Matt Pommer writes this Wisconsin Newspaper Association weekly state government newsletter. He is dean of the state Capitol correspondents, having covered government action in Madison for 36 years. Readers can contact Pommer at mpommer@sbcglobal.net.

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