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Scott Walker rejects Medicaid expansion, proposes alternate plan

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Gov. Scott Walker

Wisconsin Gov. Scott Walker speaks about his proposed reforms to Medicaid, unemployment compensation and food stamps at Business Day in Madison, an event with Wisconsin Manufacturers & Commerce at Monona Terrace on Wednesday, Feb. 13, 2013.

MADISON — Gov. Scott Walker announced Wednesday that he won’t propose expanding Medicaid services in Wisconsin, breaking with other Republican governors who decided to accept federal money for an expansion as offered under the health care overhaul law.

Instead, Walker outlined a hybrid approach that involves tightening income eligibility for Medicaid, lifting a cap on a program that covers childless adults and forcing more people to buy insurance through a government-run marketplace known as an exchange.

Walker, who unveiled the plan at a meeting of the state chamber of commerce, said the net result would drop the state’s share of uninsured non-elderly adults from 14 percent to just 7 percent — about the level seen as likely under the Medicaid expansion.

“I want to have fewer people in the state who are uninsured, but along with that I’d like to have fewer people in the state who are dependent on government,” Walker said in describing his plan.

The decision is a blow to Democrats, health care advocacy groups and others, including Wisconsin hospitals, who had urged Walker to take the expansion and the billions of dollars in federal money that would come with it. Walker said he would be spending $644 million more on state Medicaid programs over the next two years under his plan.

“I’m not certain what Gov. Walker is trying to prove,” said Democratic state Sen. Jon Erpenbach. “If we do not take this money, it’s going to go to other states.”

Had Walker accepted the expansion, the federal government would have picked up the cost for three years. But Walker and other Republicans have raised concerns that the state’s share would escalate over time.

Walker has been an outspoken opponent of the health care overhaul law, and Wednesday’s announcement was in line with his previous decision not to create a state-run marketplace for insurance providers, instead letting the federal government do it.

Walker is proposing tightening the threshold for Medicaid eligibility for adults to $11,490 for individuals and $15,510 for couples. That is 100 percent of the federal poverty level. Under the federal law, Medicaid coverage would be available for an individual earning up to $15,414 and $20,628 for a couple.

His plan won the support of Republican Assembly Speaker Robin Vos, who called it a “good hybrid” that reaffirms Medicaid as a program that takes care of the state’s poorest residents, while getting others to buy insurance through the exchange.

So far, six Republican governors have agreed to the Medicaid expansion, while fourteen have turned it down.

Nationally, 19 states plus the District of Columbia appear to be on track to expand their Medicaid programs, although some governors are encountering opposition from their state legislators. Another 17 are weighing their decision.

There is no deadline for states to decide — they could take years.

But one catch is that full federal funding for the expansion is only available for three years, 2014-2016, before gradually phasing down to a 90 percent match. Currently, the federal government pays 60 percent for Medicaid and states pick up the rest.

States that put off deciding during those first three years will forego the full federal match if they later change course.

Had Walker accepted the expansion under the federal law, the state would have received $4.4 billion in federal money through 2020, according to Wisconsin’s nonpartisan Legislative Fiscal Bureau said. But over four years, starting in 2016, new costs to the state would have totaled about $133 million.

Wisconsin Democrats argued that was too good of a deal for Walker to pass up.

“This isn’t a debate about whether you love or hate Obamacare, this is about knowing a great deal when you see one,” said state Rep. Jon Richards, D-Milwaukee. “This is the wrong decision at the wrong time.”

Democratic U.S. Rep. Ron Kind said he didn’t foresee a better deal being offered to the state to pay for Medicaid coverage “in our lifetime.”

“We need to get those who lack quality affordable health care in the system so our hospitals do not have to shift the costs of uncompensated care and emergency room visits onto our businesses and families,” Kind said.

About 1.2 million people are covered by one of the state’s Medicaid programs, such as BadgerCare Plus and SeniorCare.


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