Report: Medicaid expansion in Wisconsin could reduce state health care spending
(The Center Square) – Expanding Medicaid coverage in Wisconsin would lower the state’s spending on Medicaid but could adversely impact some healthcare providers, a recent report finds.
During a forum held on Friday, the Wisconsin Policy Forum discussed its most recent health care report on how the pros and cons of fully expanding Medicaid health coverage under the Affordable Care Act.
The expansion would only cover around 70,000 to 90,000 people because Wisconsin already has the lowest uninsured rate out of the 10 remaining nonexpansion states. More than half of the residents in the target group for Medicaid expansion already are enrolled in the program.
But those new enrollees would likely receive better coverage than they currently have in terms of costs and benefits, the report found.
The ACA provides states with subsidies when they increase their Medicaid income eligibility threshold to 138% of the federal poverty level for adults ages 19 to 64. The subsidies stipulate that the federal government will pay 90% of the costs of the additional recipients.
Unlike the nine other states which have not expanded their Medicaid programs, where full Medicaid expansion would require them to spend an average of $193.7 million more per year to cover the hundreds of thousands of added enrollees, Wisconsin would actually lower its current state spending on Medicaid by a projected $261 million in 2024.
Since 90% is a much higher matching rate than the 60.7% currently provided for Medicaid spending in Wisconsin, and the number of people who would be covered by the expansion is relatively low, expanding Medicaid would allow the state to lower its health care costs by taking advantage of the ACA subsidies.
“Wisconsin is the only state that would see significant savings in Medicaid spending,” Wisconsin Policy Forum President Jason Stein said Friday. “And that has to do with the fact that we’ve really essentially gone most of the way to expanding the program, but just at a higher cost-sharing rate for state taxpayers. Whereas other states would need to kick in a significant amount of state tax dollars to expand the program.”
However, the change would deal a blow to state residents, health care insurers and providers because they would no longer receive substantial tax credits from the ACA.
Health care providers in the state could be adversely affected by the change, since they receive reduced reimbursements for patients on Medicaid, and about 23,000 Wisconsinites would be newly enrolled in Medicaid by the expansion.
To address this problem, the Wisconsin Policy Forum said the estimated $1.7 billion savings from state expansion over the next two years could be spent to boost Medicaid reimbursement rates to providers. The state could also spend the extra money on non-healthcare services or used to reduce taxes, or some combination of healthcare and other priorities.
“We can both spend some of the money to support our health care industry, and do other things,” Medicaid Director at the Wisconsin Department of Health Services Bill Hanna said on the call. “This 1.7 billion dollars can be invested in anything that’s important to Wisconsinites – that could be roads, that could be schools, that could be health care, that could be tax cuts.”
