Wisconsin’s Partial Medicaid Expansion Covers Far Fewer People at Much Greater Cost

Among the 19 states that have yet to expand Medicaid to all adults up to 138 percent of the federal poverty level, Wisconsin is the only one that covers all adults that are below the poverty level. It’s a policy choice that compares favorably to the 18 other “non-expansion” states; however, Wisconsin’s partial expansion covers far fewer people and is much more expensive for Wisconsin taxpayers than a full expansion.

A few other states have expressed interest in the Wisconsin approach and two states – Arkansas and Massachusetts – have requested waivers that would allow them to scale back their eligibility levels, without giving up the enhanced federal matching rate for Medicaid expansions. Additional states would probably make similar reductions in coverage if the Trump administration reverses course on the eligibility requirements for the enhanced Medicaid matching funds.  (A new report by the Center on Budget and Policy Priorities explains those proposals and how they conflict with the standards for waivers.)

In light of the new interest in partial expansions, Kids Forward recently completed a report that analyzes the data on the effects of Wisconsin’s four-year experiment with a partial expansion.

There’s no question that ACA implementation in Wisconsin has made a very large dent in the number of uninsured state residents. An important factor in that success is the availability of subsidized private insurance plans available through the federal Marketplace, which is a key element of the ACA that is still under assault. In 2016 and 2017, more than 200,000 Wisconsinites enrolled in Marketplace plans. Wisconsin’s partial Medicaid expansion also contributed to the sharp drop in uninsured state residents.

However, when one considers how Wisconsin compares to the expansion states, how the limited expansion affects state taxpayers, and what happened to parents who lost their BadgerCare eligibility in 2014, the Wisconsin record doesn’t look as good:

  • If Wisconsin were to fully expand Medicaid, more than 80,000 adults between 100% and 138% of FPL would be covered in BadgerCare, and that change would yield a net savings for state taxpayers of about $190 million per year.
  • Wisconsin’s 42% decline in the number of people who are uninsured is 5 percentage points behind the average improvement in the 31 expansion states, and 5 to 9 percentage points behind each of Wisconsin’s neighbors (all of which are expansion states).
  • More than 62,000 adults lost their BadgerCare eligibility in 2014 when the state cut in half the income ceiling for parents, and a DHS study could only show that 58% of them obtained other insurance coverage (or regained BadgerCare coverage). Most of the rest are presumably uninsured.
  • Wisconsin went from having the 12th lowest rate of uninsured children in 2013 to a tie for 20th lowest in 2016, as states that expanded Medicaid coverage for parents found that there was increased Medicaid participation among kids who were already eligible.

The main argument that conservatives have made against a full expansion of Medicaid is that it makes states reliant on the continuation of the enhanced federal funding for those expansions. That’s ironic because the enhanced funding for Medicaid expansions has survived multiple attempts to repeal the ACA and because the partial expansion makes Wisconsin more dependent on the ACA insurance Marketplace, which is threatened by both legislative and executive branch actions.  Wisconsin’s success in achieving a 42% decline in the uninsured rate would suffer a major blow if conservatives make the ACA Marketplace collapse.

Wisconsin’s partial expansion has clearly been a better choice than not expanding Medicaid at all. However, fully expanding Medicaid to all adults with incomes below 138 percent of the poverty level would save state taxpayers $190 million per year, result in far more people getting health insurance, and help our state regain a leading national role in providing access to quality, affordable health insurance.

You can read the full report here.

Editor’s Note:

Since Kids Forward wrote its December 2017 report, The Wisconsin Approach to Medicaid Expansion, we have another year of Census Bureau data and new estimates by the state’s Legislative Fiscal Bureau (LFB) of the effect of a full Medicaid expansion. The new data, which are only slightly different than the numbers in the report, show the following:

  • From 2013 to 2017, the number of uninsured Wisconsinites dropped by 40.3%, compared to 48.5% in Medicaid expansion states and 24.6% in non-expansion states.
  • The latest Legislative Fiscal Bureau analysis estimated that expanding Medicaid eligibility to 138% of the poverty level would add about 76,000 adults to BadgerCare and would yield a net savings for Wisconsin taxpayers of about $185 million per year.
  • Wisconsin’s rank in coverage of children slipped a little further – to the 23rd lowest uninsured rate nationally.

In short, the cost calculations and the national data continue to show that Wisconsin’s partial Medicaid expansion costs state taxpayers more and achieves less than a full expansion.

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Jon Peacock is the research director for Kids Forward, a non-profit that advocates for effective, long-lasting solutions that break down barriers to success for children and families in Wisconsin.