In the News

By Jason Stein

MADISON, WI - States like Wisconsin that didn't fully expand their health programs under Obamacare would still miss out on billions of dollars under a proposed Republican repeal of the federal law, an industry report has found.

In a bit of political irony, mostly GOP-led states that didn't join the Obamacare party would get little in the way of credit — even from Republicans in Congress who are promoting a repeal bill.

"It locks in a massive (health care) funding disparity between expansion and non-expansion states," said Eric Borgerding, chief executive officer of the Wisconsin Hospital Association. "It's really sort of astounding that you have states that rejected Obamacare and now in the bill they're being penalized for rejecting it."

Eliminating the funding gap for the 19 non-expansion states including Wisconsin is a top priority for the state's Republicans such as Gov. Scott Walker and GOP lawmakers. But the bill in Congress doesn't do that, in spite of the number of prominent Republicans that Wisconsin has sent to Washington, D.C., including House Speaker Paul Ryan (R-Wis.) and White House chief of staff Reince Priebus.

A spokesman for U.S. Sen. Ron Johnson (R-Wis.) said he would work to ensure the state is treated fairly but offered no specifics or pledge.

"Senator Johnson is working to make sure that states, like Wisconsin, that have worked to keep Medicaid costs down and move away from dependence on the federal government are treated fairly," Ben Voelkel said. "

Separately, Johnson told Bloomberg News Monday that he hadn't yet seen what was in the Senate bill.

Under Walker, Wisconsin partially expanded its Medicaid health program for the needy known as BadgerCare Plus, but didn't do so fully. That meant the state has missed out on additional matching dollars from federal taxpayers.

The new report by the Missouri Hospital Association looked at this funding gap in light of the Obamacare repeal bill known as the American Health Care Act, which passed the House of Representatives last month and is now before the U.S. Senate. The group found that in the next few years the bill took only modest steps to close the funding gap.

By 2025 states that didn't expand Medicaid would lose out on $684 billion in additional federal money, an amount that would translate into $37 billion for Wisconsin alone,the report estimates.

"The compensatory measures for non-expansion states in the AHCA fall more than $680 billion short of providing true equity and fairness in the system for states that opted out of Medicaid expansion," the report reads.

Already, Wisconsin taxpayers have had to spend $679 million more than they would have under a full expansion of Medicaid, according to the Legislature's non-partisan budget office.

Starting in 2020, the House bill would gradually wind down provisions of Obamacare in which federal taxpayers cover 90% of the cost of expanding Medicaid — a source of the funding disparity. But Senate Republicans have been talking about delaying that phaseout, which would, in turn, drag out the disparity.

The House bill would also cap federal money for state Medicaid programs and set the baseline for that by looking at programs as they stood in 2016 — a year in which other states' expansion of Medicaid was in effect.

In 2016, the federal government spent about $785 for each person on Medicaid in non-expansion states but spent about $1,655 per person — or more than double the amount — in expansion states, the report found.

The co-chairs of the Wisconsin Legislature's budget committee, Rep. John Nygren of Marinette and Sen. Alberta Darling of River Hills, want to see that gap narrow.

"This inequity should be addressed immediately, not phased out over a number of years," the lawmakers wrote in a February letter to the state's congressional delegation.

Under current law, Wisconsin could still start collecting more federal taxpayer money by accepting the full Medicaid expansion. But that wouldn't be possible going forward if the House bill passes.

For their part, Democrats like U.S. Rep. Gwen Moore of Milwaukee have argued for years that the state should take the expansion while it can. In February, Moore said that would be the best way for Walker and Wisconsin Republicans to fix the problem for state taxpayers.

"If he wanted to take the Medicaid expansion, he could do it," Moore said.

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