Gov. Scott Walker embraces Obamacare
Though he'd like you to believe otherwise, that's what the governor has done. And yet, there is a problem with his approach.
By David R. Riemer
Gov. Scott Walker and legislative leaders may say they are refusing to implement Obamacare. But, in fact, the budget that Walker proposed and the Legislature's Joint Finance Committee has approved is putting Obamacare in place in Wisconsin.
A central feature of President Barack Obama's signature health reform law, known officially as the Patient Protection and Affordable Care Act and unofficially as Obamacare, is to expand the Medicaid entitlement program to almost every poor person.
Implementing Obamacare by expanding Medicaid all the way up to the poverty line is exactly what Walker and the Legislature's budget committee are doing.
As the health care law was originally written, states were required to expand Medicaid. Last summer, however, the Supreme Court made the decision optional. As a result, every governor and every legislature had to make a big decision in 2013: leave their state Medicaid programs unchanged in defiance of the intent of Obamacare, or expand their Medicaid entitlements and help carry out Obamacare.
Some very conservative governors and legislatures decided to stonewall. So far, more than 15 states just said no.
Fortunately, Walker and the Legislature's budget-writing committee made a more liberal decision. They chose to expand our Medicaid entitlement program, known as BadgerCare, all the way up to 100% of the poverty line.
After that, they concluded, non-poor but still low-income Wisconsinites could obtain large federal subsidies that help them buy health insurance through the other major feature of Obamacare, the new health insurance exchange.
So we owe a debt of gratitude to Walker and his allies on the Joint Finance Committee for rejecting the conservative path, embracing Obamacare, expanding Medicaid up to 100% of the poverty line and helping non-poor adults to claim a subsidy to buy insurance via the new exchange.
There's just one problem. The way that the governor and legislators are going about it will cost Wisconsin's taxpayers and employers a bundle.
That's because Walker proposed and Joint Finance picked 100% of the poverty line — rather than 133% of the poverty line — as the border between where Medicaid ends and the exchange begins.
Because of this simple policy error, a complex set of federal rules (but known to both Walker and legislators) will result in more than 84,000 Wisconsinites losing coverage under BadgerCare and relying instead on Obamacare's more complicated exchange.
To make things worse, the decision by Walker and the budget writers to expand Medicaid to 100% of the poverty (instead of 133%) will raise state budget costs — and thus increase the burden on Wisconsin taxpayers — by $119 million over the next two years.
These numbers come from the independent Legislative Fiscal Bureau. The bureau did not estimate yet another added cost, but it's a real one. Because of the choice by Walker and the budget committee, additional low-income workers will be able to claim a subsidy to buy insurance through the exchange. That means that more of our state's employers will pay a new federal tax if they provide inadequate health insurance.
It's complicated. But the facts are clear. Walker and the Joint Finance Committee, despite their words, have in fact taken a bold step to implement Obamacare by expanding Medicaid up to 100% of the poverty line.
Unfortunately, had they used 133%, they would have (as they fully understood) cut $119 million in state spending, lowered taxes on Wisconsin's employers and helped create new jobs.
There's still time for the full Legislature to get it right.
David R. Riemer is a senior fellow at Community Advocates Public Policy Institute of Milwaukee.