Referendum Question related to Medicaid (MA) Expansion dollars on November 4th Ballot

Voters will have a chance to voice their opinion during the November 4, 2014 election. A referendum question on the ballot will state: “Shall the next State Legislature accept available federal funds for Medicaid/BadgerCare?” The referendum is advisory, not binding on Governor Walker or the State Legislature.

Background:

Wisconsin has not expanded Medicaid under the Affordable Care Act (ACA), but has taken a different approach than most non-expansion states in providing coverage for people living in poverty. Gov. Scott Walker proposed a hybrid plan instead of accepting the $10 billion to $12 billion in federal reimbursement over 10 years to expand BadgerCare/Medicaid. This plan changed eligibility for BadgerCare from 200 percent of the federal poverty level to 100 percent. In addition, the plan was opened to childless adults, at or below the 100% poverty level, who formerly had been on a waiting list.

Approximately 72,000 adults with dependent children in the State lost BadgerCare eligibility due to the change in poverty level criteria. Approximately 628 Oneida County residents would be eligible for BadgerCare if the monies were accepted.

Gov. Walker argued that since subsidies for private Obamacare plans purchased in the exchange begin at 100% of poverty level, the residents who lost BadgerCare eligibility were able to purchase heavily subsidized plans in the exchange instead.

Supporters of Medicaid Expansion:

However, supporters of the expansion have noted that many of those 72,000 people (with incomes just over 100% of poverty) were probably unable to afford a private plan, even with the available cost-sharing and premium subsidies.

How much could this be costing us?  The nonpartisan Legislative Fiscal Bureau estimated in August that rejecting the full expansion cost the state $206 million in this biennium and could cost between $261 million and $315 million in the 2015-17 biennium. If the state had accepted the expansion, it would have increased federal spending in the state by $561 million, according to the bureau. Locally, in Oneida County, it is estimated that $18,110,000 would enter the economy in the form of reimbursements to health providers from 2014-2021.

Opponents of Medicaid Expansion:

Opponents counter that Governor Walker’s plan is saving the state hundreds of millions, has expanded coverage for low-income residents, and will result in better health care. As of the beginning of September, the state estimated that 25,800 former BadgerCare members had not yet enrolled in a subsidized plan through the exchange.

This means Wisconsin has not expanded Medicaid under the ACA. However,  among states that have not expanded Medicaid, Wisconsin is the only one without a coverage gap, since BadgerCare was expanded to cover everyone up to 100% of poverty level (in most states that did not expand Medicaid, eligibility limits are far lower).

The guidelines stated in the ACA for Medicaid/BadgerCare are as follows:

  • Federal funding would cover 100 percent of newly-eligible enrollees through 2016;
  • The State would gradually pay a small portion of the new expenses, capping out at 10 percent by 2020.

In the end Wisconsin’s approach to modified Medicaid expansion could end up being financially challenging, as the state has incurred significantly higher Medicaid spending this year, and does not have the federal government funding of Medicaid expansion dollars.

Sources: Louise Norris, healthinsurance.org contributor

  Wisconsin Legislative Bureau

  Citizen Action of Wisconsin

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