Free federal money not affordable
My Waukesha Freeman column from Thursday. The Wisconsin State Senate rejected any amendments to the Walker Medicaid plan in the state budget on Thursday.
Free federal money not affordable
Walker health plan right choiceWaukesha Freeman June 20, 2013, page A6 Opinion
Gov. Scott Walker’s Medicaid proposal is facing strong opposition from special interest groups and even some members of his own party. Walker rejected additional federal money for the state’s Medicaid programs, BadgerCare, instead opting for a plan that would cover 100 percent of those under the federal poverty line.
Opponents of Walker’s plan want the state to accept a promise of higher Medicaid reimbursement rates from the federal government if the state expands eligibility to 138 percent of the federal poverty line. Over the next seven years, Wisconsin would spend $3.39 billion, but the federal government supposedly would cover $3.25 billion of the cost.
Right now, Wisconsin offers the BadgerCare program to help those who cannot afford to buy health insurance. As the MacIver Institute has reported, “Currently, one in five Wisconsinites is covered by Medicaid, with some that earn up to 300 percent of the poverty level, which is $70,560 for a family of four.”
However, the state program is an unfulfilled promise. There are 130,000 people on the BadgerCare waiting list. Many of those people are actually below the federal poverty line.
The Walker Administration wants to get rid of the Jim Doyle-era waiting list by returning the program to its mission of helping those most in need. By reducing the eligibility to 100 percent of the federal poverty line, the state will be able to cover everyone underneath that line.
Those that would no longer be eligible for the BadgerCare program will be able to get federally subsidized private insurance through the new federal insurance exchange under the Affordable Care Act, commonly referred to as Obamacare.
The Walker administration predicts that the governor’s plan will reduce the number of uninsured adults aged 19-64 by more than 200,000.
In a terrific moment of irony, Democratic legislators and liberal special interest groups are suddenly afraid that people might actually need to use a provision of Obamacare. They’re afraid that even federally subsidized insurance from the new health care exchange will be too much of a financial burden. To them, the Affordable Care Act suddenly does not look so affordable.
That is why they are advocating taking the federal money for the expansion of Medicaid to 138 percent. They think that by making such a financial commitment by the state, more people will be covered and the state will be better off fiscally.
It’s the old assumption that federal money is somehow free money. Of course, we will all pay for such an expansion of Medicaid through increased federal taxes as well as increased state taxes.
Wisconsin also runs the risk of committing to the expansion of Medicaid eligibility at a time when the federal government cannot afford its promised share. As U.S. Rep.Paul Ryan warned in an interview earlier this year, “The fastest thing that’s going to go when we’re cutting spending in Washington is a 100 or 90 percent match rate for Medicaid. There’s no way. It doesn’t matter if Republicans are running Congress or Democrats are running Congress. There’s no way we’re going to keep those match rates like that.”
The federal reimbursement rate to states for current Medicaid expenditures is a little less than 60 percent. Even that percentage has been burdensome for the federal government. As part of budget talks last year, the Obama Administration tried to get Congress to accept a “blended rate” for Medicaid reimbursement that would have meant less money for the states.
This is the same Obama administration that’s promising the free federal money now at a higher reimbursement rate, along with, “If you like your health insurance you can keep it.”
The state Senate is expected begin debating the state budget today. As with the school choice issue, some invertebrate Republicans are considering joining with the Democrats to change the budget to accept the federal money.
Senate Republicans need to resist the political pressure and adopt the Walker health care plan as approved by the Joint Finance Committee. The free federal money is simply not affordable.
(James Wigderson is a blogger publishing at http://www.wigderson.com and a Waukesha resident. His column runs Thursdays in The Freeman.)