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Wisconsin Taxpayers Would Save Even More than Expected by Expanding Medicaid

Piggy bank with stethoscope

Expanding medicare would benefit Wisconsin taxpayers even more than expected.

Expanding BadgerCare coverage to all adults below 138% of the federal poverty level (FPL) would save significantly more money for Wisconsin taxpayers than previously estimated. According to a memo prepared last week by the Legislative Fiscal Bureau (LFB), expanding BadgerCare but would save state taxpayers an estimated $206 million during the 2013-15 biennium, compared to current law, but would cover 87,000 more adults than the state now expects to insure via BadgerCare at the end of the current fiscal year. That savings is $87 million more than the LFB calculated when the budget bill was being debated.

To put this news a little differently, by rejecting federal funding that would finance the full cost of providing BadgerCare to all newly eligible adults up to 138% of FPL, state lawmakers cost Wisconsin taxpayers $206 million in the current biennium and far more than that in the next biennial budget. One of the things making this news particularly significant is that the Department of Health Services estimated in late June that the state is facing a $93 million GPR deficit in the Medicaid budget. Expanding BadgerCare to more adults (including many of the 63,000 people who lost coverage in April) could potentially eliminate the need for significant Medicaid cuts, if state policymakers moved quickly.

The LFB paper, which was prepared for Senator Shilling, indicates that if lawmakers decide next spring to cover parents and childless adults up to 138% of the poverty level, effective in January 2016, state taxpayers would save between $261 million and $315 million over the last 18 months of the 2015-17 biennium.

Based on the LFB numbers and my own calculations, it appears that covering 87,000 more adults in BadgerCare could have saved state taxpayers a total of between $545 and $618 million over the period from April 2014 through June 2017.  Although it’s now too late to achieve all of the potential savings, state lawmakers can still take advantage of the Affordable Care Act to reduce costs very substantially in the next biennium.

In addition to the costs savings, there are many other compelling reasons to expand BadgerCare (see WCCF’s “Top Ten” list),  rather than expecting adults who are slightly above the poverty level to purchase more expensive private coverage through the new  insurance Marketplace.  Another recent news item reinforced those reasons – when we learned last month that only 19,000 of the 63,000 people who lost eligibility for BadgerCare have gotten insurance through the Marketplace. (Read more here.)

In November, people in many parts of Wisconsin will be able to vote on an advisory referendum regarding whether the state should accept the federal funding that would ensure that far more Wisconsinites have insurance, while also saving state taxpayers upwards of $261 million in the next biennium, and balancing the Medicaid budget. Let’s hope there is a robust debate on that issue, and let’s demand that policymakers who oppose taking the federal funds offer alternative plans for getting the state’s Medicaid budget back into balance.


Photo by 401k 2012 released under a Creative Commons Share Alike license.

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WI Budget Project

WI Budget Project