The Medicaid (BadgerCare) expansion issue is going to be a significant topic of debate in the coming months – during campaign season and continuing into deliberations on the next biennial budget. The importance of the issue has been elevated by a number of developments, including the news that Wisconsin has a $93 million shortfall in the Medicaid budget and a far larger shortfall in General Fund tax collections, as well as the Fiscal Bureau’s projections that the savings from expanding BadgerCare and taking the federal Medicaid funds would be much larger than previously estimated.
I haven’t attempted yet to come up with a comprehensive list of questions for candidates and/or legislators about the BadgerCare expansion issue, but I have suggestions for three areas of questions that might be a bit less obvious than the usual framing of the issue. These questions all relate to the state’s current and potential fiscal challenges.
The $93 million Medicaid shortfall– The Department of Health Services announced two months ago that the state is facing a $93 million shortfall in the state (GPR) share of funding for Medicaid and BadgerCare. If policymakers move very quickly, they could eliminate or substantially reduce that shortfall by accepting the increased federal Medicaid funds for expanding BadgerCare. We need to ask candidates their views on whether the state should accept that federal funding. If we don’t use those funds, what cuts in Medicaid or BadgerCare should the state make to eliminate the shortfall, or are there other options to boost Medicaid funding?
The GPR tax shortfall– The Fiscal Bureau and DOR recently announced a $281 million shortfall in state tax collections in 2013-14 – which means that the state needs to find ways to avoid a significant deficit in the 2014-15 fiscal year and to close a growing structural deficit in the 2015-17 biennium. The savings from expanding BadgerCare and accepting the increased federal Medicaid funds could be part of that solution. If Wisconsin doesn’t take advantage of the Medicaid funding, what cuts should the state make or what other alternatives should be used to get the General Fund budget into balance?
Risks of relying on Marketplace subsidies– As I explained yesterday in a WI Budget Project blog post, Governor Walker and other supporters of his BadgerCare plan contend that taking the federal Medicaid funds would be risky because Congress might eliminate or reduce that increased funding, but their plan relies on other ObamaCare funding – the Marketplace subsidies. When those state lawmakers cut in half the BadgerCare income ceiling for parents, they argued that adults over the poverty level would generally move into subsidized Marketplace coverage. However, legislation proposed by Republicans in Congress and ongoing litigation could put a halt to those subsidies. If the Marketplace subsidies end, should Wisconsin restore BadgerCare to parents over the poverty level who lost that coverage because of the 2013-15 budget bill?
Most of the arguments for and against taking advantage of the Affordable Care Act’s Medicaid expansion funds fall along familiar, somewhat ideological lines. But at some point the choices that are made should transcend ideology because they have very important practical consequences for the affected Wisconsinites and for our state budget. Like it or not, state policymakers will eventually have to make tough choices about the options for balancing the budget.
Let’s not delay and constrict public involvement in those tough choices. I hope that voters insist that the level of campaign discourse about the options should rise above the ideological rhetoric and respond to the practical questions about the consequences of accepting or rejecting the federal Medicaid funds.
Jon Peacock
