Wisconsin Would Save More than Any Other State by Expanding Medicaid

Tuesday, May 5, 2015 at 6:09 PM by

National Analysis Illustrates Budget Benefit of Expanding BadgerCare

From a budget perspective, no other state has nearly as much to gain as Wisconsin from expanding Medicaid coverage for low-income adults. That fact is vividly illustrated by the graph below, which is from a report issued last week by Kaiser Commission on Medicaid and the Uninsured.

Among the 21 states that have yet to expand Medicaid to cover low-income adults up to 138% of the federal poverty level, all the rest would have to spend a little more state funding (before accounting for indirect benefits), whereas Wisconsin is the only state that would have a large savings.  The Kaiser Commission’s report concluded that by expanding BadgerCare and qualifying for additional federal funding, “Wisconsin would see its state spending on Medicaid decline by nearly 5 percent.”  The other 20 states that haven’t expanded Medicaid yet would achieve larger gains in health insurance coverage, but the state share of their Medicaid spending would increase slightly, in the range of 2% to 6%.

 Kaiser chart on MA expansion costs

Despite the fact that the budget effects aren’t nearly as advantageous in other states, 10 Republican-controlled states have already expanded Medicaid and have accepted the federal funding.  They have made that decision for many reasons, including significantly reducing uncompensated care and achieving other sorts of health care savings that aren’t quantified in the Kaiser report.  (For other advantages of expanding Medicaid, see WCCF’s Top 10 List.)

Some of the study’s specific findings for Wisconsin include the following:

  • Our state would save $2.5 billion over the next ten years.
  • BadgerCare enrollment would increase by an estimated 57,000 in 2016, and the number of uninsured Wisconsinites would drop by about 21,000.
  • The state share of spending for uncompensated care would fall by between $26 million and $52 million over the next 10 years.

The report’s estimates of the budget savings in Wisconsin appear to be roughly similar to – but somewhat larger than – estimates made early this year by the Legislative Fiscal Bureau. The LFB numbers, which will probably be updated in the next few weeks, will be the last word on the subject. Although the Fiscal Bureau estimates will be far more important for state policymakers, the Kaiser Commission’s comparative analysis of the 21 “non-expansion” states helps illustrate that Wisconsin stands out among all those states because of the budget hit our state is taking by only partially expanding BadgerCare.

The main argument that has been used by lawmakers who oppose capturing the Medicaid funding is that we cannot count on the federal government to continue to provide that funding to states.  That’s an odd argument because it has not kept us from taking federal funding for highways and many other purposes.  And a number of GOP governors and legislatures have approved Medicaid expansions that will be automatically revoked if a future president and Congress eliminate or reduce the increased federal funding.

Later this week the LFB is expected to issue new estimates of state tax revenue for the current fiscal year and the next biennium.  Unless the Fiscal Bureau projects a sharp increase in revenue, the legislature may have little choice but to either expand BadgerCare and accept the federal funding or renege on the commitment the Governor made two years ago to provide BadgerCare coverage for all childless adults with income below the federal poverty level.

Jon Peacock

Categories: 2015-17 biennial budget, BadgerCare Plus, Blog, health care reform, Medicaid | Comments Off on Wisconsin Would Save More than Any Other State by Expanding Medicaid

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