How Accepting Federal Medicaid Funding Will Impact Wisconsin

The State of Wisconsin is continuing to be negatively impacted by its refusal to accept Federal funding for Medicaid Expansion.  Governor Scott Walker opted instead to implement the Section 1115 Waiver (Buettgens, Holahan, & Recht, 2015).  Although this waiver allows single adults eligibility if they are up to 100 percent of the federal poverty line (FPL), the Medicaid expansion would have allowed eligibility for single adults up to 133 percent of the FPL.  This leaves single adults living above 100 percent of the FPL, but below 133 percent, having to pay out-of-pocket costs to the Federal Health Insurance Marketplace.

Who is Being Hurt the Most

In an interview with MSNBC, Governor Walker stated that he wanted to have less people on Medicaid, and “…to find a way to get them into the workforce” (MSNBC, 2014).  However, most already are in the workforce.  The population impacted the most by the refusal to accept Medicaid funding is the “working poor”: non-disabled adults who are working the equivalent of full-time positions, but without the ability to access benefits from their employer.  This population falls into a gap: those living above 100 percent, but less than 133 percent of the FPL.  While the federal government subsidizes premiums for individuals between 100% and 400% of the FPL, the working poor are paying more out of pocket than if they had been approved for Medicaid through the expansion (Kaiser Family Foundation, 2015).

Uncompensated Health Care

According to the Wisconsin Hospital Association (WHA), the uncompensated health care costs for the state of Wisconsin are projected to have increased 2.7 percent in 2015, bringing the total cost to $1,386,670,707.  This is a result of the patients being unable to pay for services, or the hospital being unable to collect payment for services rendered (2015a).  Contributing to that are the 46% of the Wisconsin residents who had previously been eligible for the state Medicaid assistance, but do not have coverage through the Affordable Care Act (ACA) (2015b).  The Disproportionate Share Hospital (DSH) Program is partially funded by the state budget, and will be providing the state hospitals with $72 million over the next two years to help compensate for the rising costs associated with uncompensated care (2015b).

Economic Impacts Beyond Healthcare

According to Senator Jon Erpenbach (D-WI), Wisconsin taxpayers will have lost $1.07 billion in general purpose revenue (GPR) by the end of 2021 by continuing to refuse the federal funding for Medicaid expansion (2015).  In addition to the loss of revenue, the state has seen significant cuts to its public schools, from primary schools to universities.  Wisconsin has recently faced a $300 million cut to its UW education system (Bosman, 2015).  The budget funding which had previously been dedicated to education has now been allotted to cover the increased budget that the state needs to spend on its Medicaid program.

What Should Be Done

In May 2015, a bill was proposed which would amend the eligibility limit from 100 percent of the FPL to 133 percent.  By accepting the amendments proposed by Senate Bill 174, Wisconsin would be able to provide Medicaid coverage to single adults below the age of 65, who had fallen into the coverage gap (Wisconsin State Legislature, 2015).  Expanding the Medicaid program would provide coverage for an additional 120,000 residents, benefiting the state’s working poor population.  The U.S. Department of Health and Human Services (HHS) states that these federal funds would account for 100 percent of the costs for the first three years, and would cover at least 90 percent of the Medicaid funding indefinitely (2015).

If Wisconsin accepts the $345 million in federal money to fund the Medicaid program, the state’s budget would have the ability to allocate its own state dollars on other programs.  The state’s most recent budget proposal has called for $300 million in cuts to the education system that could have been reduced or even eliminated by accepting the federal Medicaid dollars (Bosman, 2015).  The state would benefit from seizing the opportunity to accept the federal funds and could help remedy the budget disparities that are currently impacting Wisconsin.  By not taking the federal funds, the state is putting an avoidable burden on the taxpayers of Wisconsin.

 

 

References

Bosman, J. (2015, February 16). 2016 ambitions seen in Walker’s push for for university cuts in   Wisconsin: Gov. Scott Walker’s higher education budget ignites backlash. Retrieved from http://www.nytimes.com/2015/02/17/us/politics/scott-walker-university-wisconsin.html?   _r=0

Buettgens, M., Holahan, J., & Recht, H. (2015). Medicaid expansion, health coverage, and spending: An update for the 21 states that have not expanded eligibility. Retrieved from http://kff.org/medicaid/issue-brief/medicaid-expansion-health-coverage-and-spending-an- update-for-the-21-states-that-have-not-expanded-eligibility/

Erpenbach, J. (2015, December 17). Walker policy to cost WI taxpayers $1.07 billion in next six years. Retrieved from http://legis.wisconsin.gov/senate/erpenbach/PressReleases/Pages/ Walker-Policy-to-Cost-WI-Taxpayers-1.07-Billion-in-Next-Six-Years.aspx

Kaiser Family Foundation. (2015), The Wisconsin health care landscape. Retrieved from http://kff.org/health-reform/fact-sheet/the-wisconsin-health-care-landscape/

MSNBC. (2014, November 14). Walker: Unlike DC, Wisconsin gets things done [Video file].  Retrieved from http://www.msnbc.com/morning-joe/watch/walker–unlike-dc–wisconsin-      gets-things-done-358208067815

U.S. Department of Health and Human Services. (2015). 5 years later: How the Affordable Care Act is working for Wisconsin. Retrieved from  http://www.hhs.gov/healthcare/facts-andfeatures/state-by-state/how-aca-is-working-for-wisconsin/index.html

Wisconsin Hospital Association. (2015a). Uncompensated health care report – Wisconsin hospitals, fiscal year 2014. Retrieved from  http://www.whainfocenter.com/uploads             /PDFs/Publications/Uncompensated/Uncompensated_Web_2014.pdf

Wisconsin Hospital Association. (2015b). Walker signs two-year budget into law, vetoes 104 provisions: Permanent Medicaid DSH program receives final approval from Gov.        Walker. Retrieved from http://www.wha.org/Data/Sites/1/pubarchive/valued_voice/             WHA-Newsletter-7-17-2015.htm#1

Wisconsin State Legislature. (2015, May 21). Senate bill 174. Retrieved from http://docs.legis.wisconsin.gov/2015/related/proposals/sb174

http://docs.legis.wisconsin.gov/2015/related/proposals/sb174

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