Sunday, February 17, 2013

Walker Medicaid plan- it's even more expensive than you thought

  The state budget hasn't even been formally introduced, and Governor Walker's "Work Makes you Free" Medicaid plan is already falling apart under scrutiny. The Journal-Sentinel's Jason Stein got a sneak peek at the Legislative Fiscal Bureau's evaluation of Medicaid plans, and reports that Walker's plan would cost taxpayers an extra $250 million over the next 7 years vs. taking Obamacare's Medicaid expansion. That's a whole lot more than Walker promised to his buddies at Wisconsin Manufacturers and Commerce last week, and would push the 2013-2015 budget as well as future years into larger deficits.

  The J-S's Stein broke down  the LFB paper on Medicaid options that was released late Friday, and the paper shows that Walker's plan will cover fewer people, while costing state taxpayers a whole lot more. In the paper, the Walker plan is similar to Scenario 2, where parents with children that make between 100% and 200% of the poverty line are thrown off of BadgerCare, and adults without kids that make up to the poverty line get covered. By comparison, the scenario where the state takes the Medicaid expansion under Obamacare is best exhibited in Scenario 5B. Here are the overall changes from current law under those two scenarios.

   Walker Plan vs. Medicaid expansion stats
   Change in state taxpayer costs
  Walker plan: +$14.4 million 2013-2015 budget, +$320.3 million by 2020.
  Expand Medicaid: -$43.7 million 2013-2015, +$66.7 million by 2020

  Change in number of enrollees in Badgercare by 2015 
   Walker plan: 9,000 LESS
   Expand Medicaid: 155,00 ADDED

   So if we took the Medicaid expansion, Wisconsinites would save $58 million in this budget over the Walker plan, and we'd have 164,000 more people covered on the BadgerCare rolls. And the LFB says these savings aren't even taking into account the "uncompensated costs" that states and local governments rack up when the uninsured use ER services in order to get treated. The Kaiser Family Foundation estimated the cut in uncompensated costs that Wisconsin taxpayers would see as a result of taking the Medicaid money would be at $247 million over the next decade (as shown on page 53 of this report).

Now certainly there are other variables that could come into play, and in the J-S article Assembly Speaker (and ALEC Cabin Boy) Robin Vos along with a speaker for the Department of Health Services both claim the LFB analysis doesn't tell the whole story.
The report made public late Friday lays out figures that both Republicans and Democrats will reach for in the coming months as they debate how the state should respond to President Barack Obama's health care law. Republicans Friday rejected a key assumption of the memo as requested by [Rep. John] Richards - that the federal government would have the financial ability to carry through with its pledge of bearing the vast majority of the cost of a Medicaid expansion for states like Wisconsin.

"I just absolutely do not believe the federal government is going to keep its promise once it sees the full impact of the (health care law)," Assembly Speaker Robin Vos (R-Rochester) said....

A spokeswoman for the Department of Health Services, Stephanie Smiley, said that the Fiscal Bureau study didn't account for important factors, such as increases in the state's administrative costs due to a Medicaid expansion. "The governor deserves credit for ensuring that people in poverty are covered under his plan while also realizing that there is instability with regard to federal funding," she said.
Well sure, maybe tomorrow Dems in Congress and President Obama have a complete change of heart and throw out Obamacare...and maybe Ohio State will be credited with a win at the Kohl Center today instead of having the record show Bucky blew their doors off. And if we want to be consistent, why doesn't Vos use that same "uncertainty" excuse when it comes to the hundreds of millions of federal dollars that the state gets from the Feds in highway funding, especially with a Tea Party-backed sequester looming in 12 days?

Look, I know you TeaBags don't like Obamacare - people like what's in it, what's in effect seems to work, and it makes the GOP look really bad as a result - but just because it hurts your feelings doesn't mean it won't be the law of the land through at least 2017 (and probably well after that, given that the GOP Congressmen currently have a brand name that is equivalent to low-grade horse meat). Besides, Walker tried that routine in Wisconsin last year, delaying work on the Obamacare health exchanges in the hopes that Mitt Romney would be elected president and GOPs would also run Congress, so Obamacare would be repealed. That gamble didn't quite pay off, now did it?

I'm not even mentioning the flip side of the "future federal funding" question- what if Congress decides one day to punish states that decide to try to screw with Obamacare in this way, and cuts the Medicaid reimbursement rates to states that DON'T want to expand Medicaid, to give an incentive to take up Obamacare regulations? Strangely, that more plausible scenario is ignored by GOPs in this issue.

And as for Ms. Smiley's comment on Administrative costs, the LFB admits they don't have a figure on the subject, but it would only be more costly if more people were being covered.
Administrative Costs: The increased or decreased MA enrollment that would occur under the alternative scenarios could impact administrative costs to the state and to the multicounty income maintenance consortia responsible for making MA eligibility determinations and providing ongoing case management functions. Due to uncertainties regarding the extent of those impacts, they are not included in the preliminary estimates.
What the LFB memo doesn't mention is that it is likely that many of these positions that would take care of the extra administrative work in signing up new people for Badgercare and Obamacare coverage would be FEDERALLY-FUNDED (most federal programs fund positions to make sure the state can carry out its provisions), so the cost to state taxpayers would be relatively small. And any extra costs in administration would be more than made up for in the savings that would result in lower uncompensated care costs, as the Kaiser Family Foundation mentions ($24 million a year in savings in Wisconsin).

The LFB report and the GOP's lame excuses on Medicaid expansion give you a good idea just how much of a dog this Walker alternative plan is. It is clear that the Walker Medicaid plan is a horrible deal for taxpayers, insures fewer Wisconsinites, overloads the Obamacare exchanges, and makes outcomes for low-income individuals worse, not better. And I'm betting Scotty won't care to realize just how much more work will need to be done to correct the obvious flaws in the plan, and will double down on this failure even as the holes in his deficit-addled budget become even more apparent when it's released on Wednesday.


  1. "I'm not even mentioning the flip side of the "long-term federal funding" question- what if Congress decides one day to punish states that decide to try to screw with Obamacare in this way, and cuts the Medicaid reimbursement rates to states that DON'T want to expand Medicaid, to give an incentive to take up Obamacare regulations? Strangely, that more plausible scenario is ignored by GOPs in this issue."

    Actually it's the exact opposite: the one and only reason that the states could (in practice) decide to accept the Medicaid expansion or not is because Obamacare (as passed) made it an all-or-nothing proposition: that all existing Federal Medicaid funds would be withdrawn if the expansion was not accepted. This was the part of Obamacare that was struck down by the SCOTUS as being unconstitutionally coercive (see e.g.

    The upshot is, the one and only reason Walker gets to make this decision is the *exact* same reason why the Feds cannot tie states' hands to pick up the Federal share of expanded Medicaid if the latter should flake out in future (i.e. on account of Republican desire to force Federal bankruptcy where no reason exists). The United States Congress cannot alter the law to force states to cough up a larger fraction of expanded Medicaid costs without giving them an out; nor can the Executive do so without violating the law as it stands.

    Walker's argument of potentially flakey Feds falls down on another front, too: while decrying that the Feds could flake out on subsidies for expanded Medicaid that would make low-income Wisconsinites' insurance affordable, his proposal is to insulate them from this risk by pushing them onto Exchange-brokered private insurance... that is only affordable to them because of, er, Federal subsidies.

  2. Geoff- Thanks for that clarification. And for explaining the DoubleSpeak in Walker's decision- allegedly worrying about the feds funding it, but relying on federal funding with the exchanges.

    The reasoning is total jive, in addition to the fact that it's costing Wisconsinites a lot more and breaking the state's budget for the future.

    1. Walker wouldn't make it very far in investments: his idea of a hedge being something subject to the exact same risk he'd be trying to hedge against.

      Whenever I've challenged Walker supporters on the MJS boards to say who his decision actually helps, all I get are crickets. So I've put together a handy guide to fill the vacuum:

      It hinders

      1. WI state taxpayers, who have to stump up more for the Walker plan.
      2. WI federal taxpayers, who have their taxes changed not one whit by this decision but now get nothing for it instead of something.
      3. The low-income uninsured, who are going to be paying more out of pocket and fewer are going to be covered.
      4. Wisconsin's insured, who are going to face higher premiums to cover the ER-based care of a greater number of uninsured than otherwise.
      5. Wisconsin's unemployed since it the Medicaid expansion would have created another 10,000 jobs for them (see
      6. The Wisconsin economy, which would have been about 0.3% larger with the infusion of Federal monies.

      It helps

      1. Walker's Tea Party credentials.