Another Bogus Attack on Wisconsin Medicaid

Opponents continue to heap criticism on the state of Wisconsin for its refusal to expand Medicaid under the Affordable Care Act, insisting that the state is losing millions of dollars as a result. But over at the NCPA’s Health Policy Blog, Senior Fellow Devon Herrick explains why Wisconsin took the right route in restructuring its Medicaid program.

The Affordable Care Act encourages states to expand Medicaid eligibility to include adults up to 138 percent of the federal poverty level (FPL); in return, the federal government promises to pay 100 percent of the costs through 2016, dropping to 90 percent by 2019.

Wisconsin already had a generous Medicaid system — most residents up to 200 percent of the FPL were eligible for the state’s Medicaid coverage known as BadgerCare, and pregnant women and children had access to the program at even higher income thresholds. But as the low-income uninsured flooded the program, the state had to cap enrollment.

Faced with these structural problems, Wisconsin chose not to accept the federal government’s offer to expand to 138 percent of the FPL. Instead, Wisconsin reformed BadgerCare to cover its residents up to 100 percent of the FPL. Individuals above the poverty threshold were transitioned into the Exchanges, where they could purchase subsidized private coverage (subsidies in the exchanges are available up to 400 percent of the FPL).

This offer appears generous, but Medicaid enrollees tend to fare worse than patients with private insurance, says Herrick, and access to care would only become more limited if the state’s Medicaid rolls are flooded with new enrollees. By moving Wisconsinites into private insurance, they will likely have better access to doctors. On average, Wisconsin pays physicians who participate in Medicaid just half the rate that private insurers would typically reimburse, making doctors less willing to treat Medicaid patients.

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