Medicaid expansion would have saved Wis. $206 million: study

Wisconsin Democrats are keeping the pressure on Republican Gov. Scott Walker to expand Medicaid eligibility with a new report that shows the move would save the state hundreds of millions of dollars over the next three years.

Under the new federal healthcare law, the federal government would pay the full cost through 2016 of expanding Medicaid to all adults earning 138% of the federal poverty level or less. Federal coverage would decrease annually after that before settling at 90% in 2020.

The influx of federal aid would have saved Wisconsin $206 million in the current two-year budget if it had expanded Medicaid, the nonpartisan Legislative Fiscal Bureau said in a memo prepared at the request of state Sen. Jennifer Shilling (D-La Crosse). If Walker agrees to the expansion in the 2015-17 state budget, the move would save the state between $261 million and $315 million depending on enrollment, according to the report.

Walker has defended his decision not to expand, saying he doubts the federal government would honor its commitment to cover the costs. The governor's spokeswoman, Laurel Patrick, said in an e-mail to the Associated Press that if anyone thinks the debt-saddled federal government won't renege on its promises "they are not living in reality."

The Fiscal Bureau's memo represents another salvo in Democrats' campaign to pressure governors who have rejected the expansion to reconsider. President Barack Obama's administration released a report in July saying expansion would improve access to care, contain people's costs and create jobs. The report said expansion in Wisconsin would mean coverage for another 120,000 people by 2016 and reduce the number of people facing catastrophic out-of-pocket costs or borrowing to pay medical bills.

Rather than opting for the full expansion, Walker and the Republican-controlled Legislature expanded coverage to all adults with incomes at or below the poverty level. Some who didn't have children had been on a waiting list previously because of enrollment caps. Because the expansion was partial, the federal government will cover only 40% of the cost.

According to the memo, that means the state will spend about $815 million on Medicaid benefits by the end of the 2013-15 state budget. If Walker had opted for full expansion with 100% federal coverage for new enrollees, the state would spend only $609 million. If current state law remains in place for the 2015-2017 budget, the state will spend between $965 million and $1 billion on benefits, depending on enrollment levels. If Walker went for full expansion, the state would spend $704 million to $754 million.