In Wisconsin and a number of other states, concerns have been raised about taking tainted ObamaCare dollars for the expansion of Medicaid. With that concern in mind, lawmakers here approved a health care plan that rejects those Medicaid dollars and will cost Wisconsin taxpayers almost $150 million more in the 2013-15 budget period than an alternative plan and will cover about 85,000 fewer adults in BadgerCare than that alternative.

The rejection of federal Medicaid dollars has been confusing to people in Wisconsin and other parts of the country who have noted that federal funds comprise a very large portion of most state budgets. In our state, for example, federal funding makes up 28% of the 2013-15 biennial budget and will surpass $10 billion in the second year of that budget.  To help us distinguish which are good federal dollars and which are bad, David Blatt, the director of the Oklahoma Policy Institute, came up with a creative idea – color code the federal money.

Think of how much time and energy could have been saved in the Joint Finance Committee’s deliberations if federal officials had simply implemented Blatt’s tongue-in-cheek plan:“Good federal dollars, which will retain their traditional green color and be known as G-bills, will continue to flow into states to pay for road construction, military bases, disaster relief, environmental cleanups, agricultural subsidies… and many other programs. …The new federal dollars, to be printed in orange and known as O-bills, will be issued exclusively to cover the cost of extending Medicaid to low-income adults under Obamacare. O-bills will carry a warning label stating, ‘CAUTION: Use of this money may contribute to out-of-control spending and socialism.’ ”
(Read more in Blatt’s June 19 column in the Oklahoma City Journal Record.)

In Wisconsin and elsewhere, one of the arguments that opponents of the Medicaid expansion frequently make for turning down the enhanced federal funding is that Congress and the President might cut those dollars at some future date. Several members of the Joint Finance Committee made the point that it would be cruel to cut people from BadgerCare years from now if the funding from Congress proves to be insufficient. To avoid taking that risk, apparently it makes more sense to cut about 90,000 parents from BadgerCare right now.

Hmm, maybe that line of argument isn’t exactly an open and shut case for rejecting the enhanced Medicaid funding. Instead, it underscores why we need a clear and easy way to avoid the current confusion – by simply color coding all federal funds.

All joking aside, some conservative states like Arizona have shown that it’s possible to accept the enhanced federal dollars with a contingency that the expanded coverage will end if Congress and the President don’t deliver on the federal funding. The possibility of cutting off Medicaid eligibility at some date well in the future is hardly a cruel fallback plan, when the alternative is cutting off that eligibility in January 2014.

The biennial budget bill won’t be the end of this debate because there is no deadline for the state to accept the ACA Medicaid dollars. There will be many additional opportunities for state policymakers to put ideology aside and improve access to health care, reduce uncompensated care and save state taxpayers money.

Jon Peacock