Legislative Democrats: Killing Medicaid expansion would cost state another $1 billion

By: - March 12, 2021 6:05 am
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With the new American Rescue Plan Act signed into law, Democrats in the state Legislature are warning that the Republican majority would cost Wisconsin more than $1 billion by refusing to accept a federally funded expansion of Medicaid in the 2021-23 budget.

A provision in the new federal COVID-19 relief package, which President Joe Biden signed Thursday afternoon, adds a two-year sweetener for states to accept federal Medicaid expansion funds under the Affordable Care Act (ACA). A Legislative Fiscal Bureau memo — drafted this week at the request of Joint Finance Committee Democrats — states that under that bonus provision, Wisconsin would receive an additional $1.025 billion over two years if it agrees to accept the expansion. Wisconsin is one of 12 states that haven’t yet accepted ACA Medicaid expansion.

The ACA expanded Medicaid as part of its objective to expand health insurance coverage to as many uninsured people as possible. States that made non-elderly, non-disabled adults eligible for Medicaid with incomes up to 133% of the federal poverty level could receive federal funds to cover the full additional cost starting in 2014, ratcheting down to 90% by 2020.

Under Gov. Scott Walker, Wisconsin rejected the expansion funds and pursued its own alternative, expanding Medicaid — or BadgerCare as it’s called in Wisconsin — to cover childless adults, but only for those with incomes up to 100% of the poverty level: $12,760 a year for an individual, or $21,720 for a family of three. Walker’s plan also reduced income thresholds for parents to 100% of the poverty level.

Gov. Tony Evers’ proposed 2021-23 budget bill includes accepting the ACA Medicaid expansion subsidy, which by itself would save the state $635 million, according to the fiscal memo. The new $1 billion bonus is in addition to that amount.

Evers included a Medicaid expansion provision in his 2019-21 budget, but the Legislature’s Republican leaders stripped it from the document, and they have already said they will remove it from the new budget.

In a joint statement Wednesday, Democrats on the finance committee took the panel’s Republican majority to task for their position.

“It was already foolish for Republicans to reject the BadgerCare expansion in the last budget, but we cannot afford to lose out on a billion dollars in additional funding,” stated Sen. Jon Erpenbach (D-West Point), adding that rejecting the expansion would be “a costly missed opportunity and a slap in the face to every Wisconsin resident.”

Sen LaTonya Johnson (D-Milwaukee) said that expansion would “make a significant impact” on three priorities for children and families: access to health care, equity and protecting taxpayers and the economy. “Wisconsin has a chance to do the responsible thing with our tax dollars and provide 90,000 more people with quality health coverage,” Johnson stated.

Meanwhile Thursday, whether by coincidence or conscious counterprogramming, Assembly Majority Leader Jim Steineke (R-Kaukauna) issued a statement promoting a group of health care bills that the Assembly Rules Committee put on the Assembly schedule on Tuesday, March 16. The bills “highlight Assembly Republicans’ commitment to health care,” Steineke stated.

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Erik Gunn
Erik Gunn

Senior Reporter Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.