Federal health care law will cost state, secretary says

By Jason Stein of the Journal Sentinel
Updated: 2:16 p.m.
Madison - The state health secretary will tell Congress on Thursday that the state will pay more for its health care programs for the needy under the looming federal health care law but does not have full financial projections on that claim.
Dennis Smith, the point man on health care for Gov. Scott Walker's administration, said Wednesday that he will argue that the federal law commonly called Obamacare will cost Wisconsin taxpayers more than it will save. That's because, according to Smith, it won't provide enough additional reimbursement to the state to cover the full number of people who will sign up for Medicaid health programs for the poor such as BadgerCare Plus.
"The math is just not going to work out," Smith said in a conference call with reporters
But Smith said that the state Department of Health Services hasn't yet completed its financial projections on the impact of the federal law on the state budget. So far, the agency hasn't formally responded to an open records request by the Journal Sentinel for those projections.
Smith is scheduled to testify Thursday morning before a health subcommittee of the Energy and Commerce Committee in the Republican-controlled U.S. House of Representatives.
On the call Wednesday, he said that there are an estimated 113,000 parents and children who currently qualify for Medicaid but who are not enrolled and who will sign up for it because of the federal health care law's requirement that people obtain health coverage. The federal government will pay for about 60% of that cost and the state government will pay the rest.
That cost will be balanced against the 21,700 childless adults for which the federal government will initially pick up the full cost of coverage - an expense that is currently shared between the state and federal government.
Smith said that was a "straightforward" calculation of cost but also acknowledged that the state has yet to actually do it.
"We're still building our models," he told reporters.
State Rep. Jon Richards (D-Milwaukee), a supporter of the federal law, said Wisconsin should take advantage of the additional federal money under the legislation to cover more of its citizens.
"The smart thing for Wisconsin to do is get as much federal money as possible to pay for as much expansion as possible," Richards said, speaking Wednesday before Smith's comments became public.
Smith did make clear, however, that Walker would be deciding whether to expand Medicaid based on the overall impact of the federal health care law on patients, the state, and businesses such as hospitals that could see increased revenues from an expansion of coverage.
"The governor has not made any decision about the Medicaid expansion. I want to emphasize that in big glowing neon lights," Smith said.
In criticizing the federal health-care law, Smith also pointed to the state's own experience in charging premiums to Medicaid recipients with incomes at or above 133% of the federal poverty level, noting that a significant portion don't pay their premiums.
Smith said that suggested that significant numbers of people might not choose to buy private health insurance subsidized by the federal government under the law.
One key difference between the state premium payments under Medicaid and the premiums envisaged under the federal law will be that the federal government will require individuals to obtain health coverage and will penalize those who do not.