Too many Wisconsinites do not have access to quality, affordable health care. However, Wisconsin can significantly reduce that problem and save money at the same time by using available federal funding to make more low-income adults eligible for BadgerCare.
The Affordable Care Act (ACA) provides funding for states to expand health insurance coverage for low-income adults who have an income below 138% of the federal poverty level (FPL). Wisconsin had a great opportunity to close a very large gap in BadgerCare—coverage for “childless adults” (adults who aren’t custodial parents of a dependent child). However, instead of fully expanding BadgerCare and qualifying for almost full federal funding to cover low-income childless adults, state lawmakers decided in 2013 to partially expand coverage for those adults (up to 100% of FPL). To offset part of the cost, they halved the BadgerCare eligibility limit for parents (from 200% to 100% of FPL), and more than 60,000 parents lost their health insurance coverage.
Here are the top ten reasons why Wisconsin should accept the federal funding and cover more parents and childless adults in BadgerCare:
1) To reduce the number of uninsured and the amount of uncompensated care – Many of the roughly 80,000 adults below 138% of FPL who could be in BadgerCare are uninsured because of the state’s choice not to take the federal funding, and that significantly increases the uncompensated care delivered by hospitals. The Governor recognized that problem when he included $30 million of state funding in each of the last two budget bills for hospitals that have a disproportionate share of uncompensated care. Although the cost of uncompensated care dropped substantially in Wisconsin after the ACA caused a sharp decrease in the uninsured population, hospitals in Medicaid expansion states have enjoyed even larger savings from reductions in uncompensated care.
2) To improve access to preventive care and save lives – Reducing the number of people without insurance enables far more people to get preventive care, which makes our health care system more cost effective. In addition, research shows that states that have extended Medicaid coverage to more adults have seen fewer deaths—especially those caused by disease, accidents, injuries, and drug abuse.
3) To reduce insurance coverage disparities between white people and people of color – Implementation of the ACA resulted in significant coverage gains among all Wisconsinites, regardless of race or ethnicity, but coverage rates for people of color still lag behind white people. Despite gains, Latinx and Native Americans still have high uninsured rates. Fully expanding Medicaid would increase coverage for people under 138% of FPL, and would lead to more people of color being covered, especially among Latinx Wisconsinites, who are uninsured at rates three times higher than white people.
4) To significantly reduce spending of state tax dollars – A January 2018 Legislative Fiscal Bureau (LFB) estimate concluded that covering adults to 138% of FPL and accepting the full federal funding would yield a net savings for state taxpayers of slightly over $200 million per year.
5) To reduce premiums for coverage in the Marketplace – Putting adults below 138% of FPL into BadgerCare would create a lower-cost pool of participants in the health insurance Marketplace, which would lower premiums for the adults who buy coverage there. A statistical analysis by Wisconsin Citizen Action of all the premiums across the country found that the decision in Wisconsin not to cover adults in BadgerCare to 138% of FPL raised the cost of Marketplace plans in 2014 by an average of about $21 per person per month. This trend continues today. According to the most recent Marketplace enrollment data, states that expanded Medicaid enjoyed premiums that were 15% lower than states that did not.
6) To avoid substantial cuts to health programs and other parts of the state budget – The cost of Medicaid services, like other health care services, has been rising steadily and another significant increase is likely in the next DHS budget request. By accepting the increased federal funding for expansion of coverage to 138% of the poverty level, state lawmakers could protect against cuts in health care services and might also free up money for other state spending priorities.
7) To prevent financial hardships for low-income working adults and families – The Legislative Fiscal Bureau estimated that about 80,000 additional adults would be covered by BadgerCare if eligibility is increased to 138% of FPL. Although those low-income adults are typically eligible for either employer-sponsored insurance or subsidized plans through the Marketplace created by the ACA, many of them cannot afford the premiums or other cost-sharing. Many parents who lost their previous BadgerCare coverage are enduring substantial financial hardships to purchase private coverage.
8) To ensure stable coverage for more low-income parents – When state lawmakers cut the BadgerCare income limit for parents from 200% of FPL to just half of that, they justified that decision on the basis that those adults could potentially buy subsidized insurance plans through the federal Marketplace. However, changes that threaten the viability of the Marketplace would mean that an even larger number of the 60,000 people who lost BadgerCare eligibility in 2014 are at risk of becoming uninsured. Expanding BadgerCare to 138% of FPL would significantly reduce the number of Wisconsinites at risk of losing their access to affordable health insurance.
9) To assist counties and improve access to mental health and substance use services – Some community-based and inpatient Medicaid services are the financial responsibility of counties rather than the state. By getting 90% federal funding for coverage of childless adults below 138% of FPL (rather than 59%), the counties would enjoy substantial savings for these services and could either improve access and delivery of those county-funded services or use the savings for other purposes, including property tax relief.
10) To improve coverage of children – When former Governor Tommy Thompson proposed the creation of BadgerCare in 1997 he argued that covering parents would improve enrollment of their children, and that was proven correct. The converse is also true. Budget writers assumed that ACA implementation would substantially increase participation of Wisconsin children, which did not happen. Knocking tens of thousands of parents out of BadgerCare in 2014 resulted in a sharp drop in enrollment of kids above the poverty level. Wisconsin was once a national leader in insuring children, but is now in the middle of the pack because Medicaid expansion states have made substantial progress in coverage of kids.
Wisconsin is one of only 17 states that has declined to use funding available from the Affordable Care Act to fully expand Medicaid for childless adults. This decision has cost state taxpayers more than $1 billion, and leaves thousands in our state uninsured. Expanding BadgerCare would mean more adults—and kids—would be covered, Marketplace premiums would likely decrease, and we would improve access to preventative care for thousands of Wisconsinites. We can still opt-in for full expansion and save hundreds of millions in the next budget, cover nearly 80,000 more people, and free up state and county funding to pay for other necessities.
Jon Peacock & William Parke-Sutherland