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Scott Walker’s Medicaid Maneuver

Nov 19, 2013

Wisconsin Gov. Scott Walker, who appears to be laying the groundwork for a 2016 presidential run, is getting attention for his entitlement reform. He is one of 25 Republican governors who are rejecting the health law’s expansion of Medicaid. But Wisconsin’s own Medicaid program, known as BadgerCare, was more generous than many states, and now Walker wants to transfer many of those people to the insurance marketplace created by the law. It’s a plan that allows Walker to reject Obamacare, turn down federal money on the table, but still provide health coverage to many of Wisconsin’s poor and working poor residents.

“It’s part of overall reform,” Walker said, “where our goal is to get more people out into the workplace, more people covered when it comes to health care and fewer people dependent on the government, not because we’ve kicked them out but we’ve empowered them to take control of their own destiny.”

Republican Wisconsin Gov. Scott Walker (Photo by Eric Thayer/Getty Images).

Walker’s plan opens up Medicaid in Wisconsin to about 83,000 poor, childless adults. They were previously locked out because of a cap on the number of people who could be in the program. At the same time, Walker announced that Medicaid is being cancelled for 77,000 people who have incomes above the poverty line. 

Walker’s maneuver is possible because Wisconsin’s Medicaid program was already one of the more inclusive ones in the country. It allowed people making up to 200 percent of the federal poverty level to be covered by BadgerCare. Now he wants to roll BadgerCare eligibility back to 100 percent of the poverty line, and put everyone making between 100 percent and 200 percent – a range of $11,490 to $22,980 for a single person – into private, subsidized coverage that they buy on the new marketplace.

Walker says everyone losing coverage will be able to buy subsidized plans under the Affordable Care Act, and many will find monthly premiums under 20 bucks.

“You’re going to hear some detractors claim that moving people to the private market or to the exchanges isn’t affordable,” Walker says. “I think most people would find it hard to imagine that with the tax subsidies, that $19 a month is somehow not affordable. I think it is.”

Jessica Jaglowski is a stay-at-home mom in Milwaukee who recently got a letter from the state saying she would be dropped from Medicaid. Her husband will be able to get coverage through his job, and their kids can stay on Medicaid. So Jaglowski’s on her own in the family trying to stay insured.

“It’s somewhat comforting to hear that there are exchange options available, but we don’t know what those will mean and what will be covered, and what doctors we’ll get to see” Jaglowski says. “It is very stressful, and it’s overwhelming looking through the plans because we don’t even know really where to start.”

Judy Solomon, a health policy researcher at the Center on Budget and Policy Priorities, says Walker’s reforms put Wisconsin in a unique position. The state is bumping people off Medicaid but everyone under the poverty line still has a chance at getting coverage.

“There is a positive part of the story, which is that everybody does have a pathway to coverage,” says Solomon.

She says in some states that also rejected a full expansion, there’s a group of adults who don’t qualify for Medicaid and are too poor to get subsidies on the exchange.

Solomon says Wisconsin is a longtime leader in serving the poor, and the state’s decision to reject the federal Medicaid expansion money to cover even more people is puzzling from a fiscal perspective.

“It’s ironic to me that when you have the pathway to providing a uniform system of coverage with the rest of the country that they’ve decided to go in the opposite direction,” she says.

Solomon cites a Kaiser Family Foundation survey showing states that rejected a full expansion are seeing faster growth in Medicaid spending (KHN is an editorially independent program of the foundation). And a non-partisan review estimates Walker’s plan will cost state taxpayers an additional $460 million through 2020 than if he'd gone for a full expansion that would have pulled more federal dollars into the state.

Last week, Walker said he would tweak his plan because of the troubled startup of healthcare.gov, the web portal for 36 states that are relying on the federal government to run their marketplaces.

Walker says he will let the those set to be dropped from Medicaid on Jan. 1 stay on three months longer, so they have more time to sign up for plans on healthcare.gov.

“We are going to take decisive action to make sure that the people of this state, particularly people in need, do not fall through the cracks,” Walker said.

The reprieve is likely to clear the state Legislature in the next few weeks.

Walker’s Medicaid plan requires a waiver from the federal government, which is pending but expected to be approved.

This article was produced in partnership with NPR. Erin Toner is a reporter with WUWM Milwaukee Public Radio.

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