Medicaid expansion still on the table

Wisconsin State Capitol
Wisconsin State Capitol

Gov. Tony Evers was unable to push Medicaid expansion through in his first state budget, a centerpiece of his 2018 campaign against former Republican Gov. Scott Walker, who rejected the federal funding provided under the Affordable Care Act.

However, now that Evers has signed the 2019-’21 budget into law, the question of Medicaid expansion isn’t likely to disappear from view, with the governor pledging to continue fighting for the program’s expansion.

“Just because it didn’t happen in this biennium doesn’t mean it’s going away,” said Eric Borgerding, president and chief executive officer of the Wisconsin Hospital Association. “The governor has made that clear. Even (Republican Senate Majority Leader Scott Fitzgerald) has noted that expansion will be back in future bienniums. The question that’s out there right now about expansion is what happens between now and the next state budget?”

The issue has proven divisive for years, with Republican state lawmakers refusing to draw down about $1.6 billion available in federal funding under the ACA, arguing the state would ultimately be on the hook to sustain the expanded program over the long-term. Evers and Democratic lawmakers have touted that those dollars would make Medicaid available to about 82,000 more parents and childless adults and free up funding to pay for other health care needs.

Those on both sides of the issue have bolstered their arguments by invoking competing studies. A report released in February by the conservative Wisconsin Institute for Law and Liberty and the Center for Research on the Wisconsin Economy, based at the University of Wisconsin-Madison – argued Medicaid expansion would cost the state’s economy $600 million annually, costs that would be shifted onto private payers.

It was followed by a different report from two UW-Madison economists claiming Medicaid expansion could instead save health care providers in the state up to $100 million annually, with the savings being realized from the reduction in uncompensated care costs for health care providers.

Throughout the budget process, the Wisconsin Hospital Association has advocated for a bipartisan solution on the issue of Medicaid funding. Yet health systems and hospitals would benefit from the program’s expansion, as it would allow them to be compensated for services that are currently written off as a community benefit.

Wisconsin hospitals provided $1.1 billion of uncompensated services, either as charity care or as bad debt, to patients in 2017, according to the most recently available WHA report.

“In general, providers would like to see an expansion,” said Lisa Grabert, visiting professor and health policy researcher at Marquette University. “I think the loudest voice at the state level and typically at the federal level are hospitals. Hospitals, from a pure revenue perspective, stand to benefit quite a bit from expansion.”

Area health systems did not respond to requests for comment on this report.

Wisconsin is among 14 states to not accept Medicaid expansion. It has taken a different approach from other non-expansion states, however. It hasn’t expanded Medicaid, but individuals with incomes up to 100% of the federal poverty line are already eligible for BadgerCare. If Wisconsin were to expand Medicaid under the ACA, eligibility would be extended to individuals with incomes up to 138% of the poverty line.

The debate over Medicaid expansion continues the decade-long political fight regarding the ACA.

With the power split resulting from the election of a Democratic governor and Republican Legislature, the issue is symptomatic of an underlying fissure in state government, said Barbara Zabawa, clinical assistant professor for the University of Wisconsin-Milwaukee College of Health Sciences.

“Underneath all of this discussion about Medicaid expansion is still the foundational question of whether we as a society and as a state think everyone should have health insurance,” Zabawa said. “I’m not sure that we have consensus on that, which is the reason we have this fight over whether to expand Medicaid or not. It’s a display of the culture war that’s at play in so many areas of policy.”

Still, Borgerding said the final state budget included “a lot of progress” for the health care industry, including “substantial” Medicaid reimbursement increases for hospitals and physicians, more funding for safety net hospitals and behavioral health providers, and the expansion of telehealth.

“It’s not as much as we would have liked to have seen, or as the Legislature would have liked to have seen, but that’s how the process works,” Borgerding said. “So when we step back, it’s still very positive for health care.”

The upcoming biennium will provide an opportunity to explore other approaches to the Medicaid program, with the possibility of finding a bipartisan solution, Borgerding said.

“Medicaid expansion is clearly on the table,” he said. “Evers will most certainly include it in his next state budget bill. That conversation is going to continue. So it might behoove a state like Wisconsin, if we’re trying to build a bridge between the two sides on this issue, to look to what some other states are doing … The next year-and-a-half is going to be interesting because it’s not going away and there could be some models that we could take bits and pieces from in other states to put together a pathway forward for Wisconsin.”

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