Gov. Scott Walker’s health care plan would cost taxpayers about $250 million more than a full Medicaid expansion would, according to a nonpartisan analysis released Friday.
The Legislative Fiscal Bureau’s analysis showed the state would pay $320.3 million more by 2020 under Walker’s plan, compared to $66.7 million more under a full expansion of Medicaid that Democrats seek and a savings of $164.2 million under a third route, which is seen as a middle ground between the two plans.
While the other two plans rely much more on federal spending, Walker’s plan would require the federal government pay $460.6 million more by 2020. The full expansion plan would cost the federal government $4.38 billion more, and the third route would cost $4.1 billion more, the analysis found.
Walker announced Wednesday he would reject the full Medicaid expansion made optional under the federal health care law. Instead, he announced a separate plan that he said would cut uninsured residents by 224,850, about 28,000 fewer than the full expansion state Democrats support.
By turning down the full Medicaid expansion, Walker also declined additional federal funds. The federal government would have paid 100 percent of the expansion’s costs until 2016, a rate which would gradually decrease to its permanent rate of 90 percent in 2020.
Walker said given the federal government’s debt problems, he is unsure whether it would maintain those funding promises. However, opponents pointed at the example of Arizona’s Republican Gov. Jan Brewer, who accepted the expansion under a condition that her state can back out of the expansion if the funding rate changes.
Walker said he would instead keep the current reimbursement rate, in which the federal government pays about 60 percent of the state’s Medicaid costs, and the state pays about 40 percent.
“It’s unfortunate that politics got in the way of a good policy decision for Wisconsin’s low-income population and the taxpayers,” said Mike Bare, research coordinator for Community Advocates Public Policy Institute, an organization that supports the third health care plan.
Walker’s plan would reduce Medicaid eligibility rates to 100 percent of the poverty level, moving those above that level to private insurance exchanges set to begin in 2014. His plan does not apply to children or the elderly.
However, Walker would lift a 2009 Medicaid cap for adults without children, allowing 82,000 childless adults under 100 percent of the poverty level into Medicaid. Under this cap, the current wait list for the program is more than 100,000.
He said he would also move 87,000 parents between 100 and 200 percent of the poverty level out of Medicaid and into private exchanges. Walker’s changes would amount to 5,000 fewer Medicaid enrollees.
Walker contends his plan would reduce dependence from the government while helping those that are truly in need.
“Some will portray this as not caring about people,” Walker said Wednesday. “I think it’s just the opposite. I care too much about the people of this state not to empower them to control their own destiny.”
Other plans up for consideration
Until the Legislature and federal officials approve Walker’s plan, Democrats and advocacy groups will continue to push for alternate plans, two of which were included the in the LFB analysis.
The Democrats’ plan for full expansion would not change the Medicaid parents program and would use federal funds to expand the childless adults program to those under 133 percent of the poverty level.
The third route would set Medicaid eligibility for both parents and childless adults at 133 percent of the poverty level, not the 100 percent figure from Walker’s plan. It also differs from the Democrats’ plans in reducing the eligibility rate for parents. This plan is the only one that would save the state money, according to the LFB.
Jon Peacock, research director for Wisconsin Council on Children and Families, said Congress did not design the private insurance exchanges for low-income families.
In his announcement, Walker said premiums in the exchanges will be affordable, pointing to the lowest premium of $19 a month. Peacock, however, said this figure does not include co-pays and deductibles, and people “barely scraping by” do not have enough money for all those costs, which would lead to uninsured parents.
Walker’s office did not respond to requests for comment.