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Up to 90,000 Wisconsin residents could get better health insurance if Wisconsin agrees to expand Medicaid under the Affordable Care Act, and rural residents would be the most likely to benefit, according to a new report published Thursday.

Expansion would give the state just over $1 billion from the federal government for each two-year state budget cycle, along with a one-time boost of $1.29 billion, concludes the report, published by the Wisconsin Policy Forum.

The forum’s practice is not to make recommendations based on its analysis, but instead to present alternatives and their probable outcomes.

The report finds that the number of people moving from the rolls of the uninsured would be more modest than in many states — about 23,000, according to one projection.

More striking, however, is that the state could save more than $200 million a year just on coverage it already provides, according to the report.

The federal Affordable Care Act (ACA), enacted in 2010 and implemented in 2014, established a government marketplace for individual health insurance plans and set standards for those plans. It also included provisions to expand health care coverage under Medicaid, a joint federal-state program.

States that accept the expansion agree to cover people with incomes up to 138% of the federal poverty guideline. In return the federal government pays 90% of the cost for the additional Medicaid recipients. The standard federal matching rate in Wisconsin is 60.7%.

Former Gov. Scott Walker, a Republican, declined to take the expansion and its requirements when the ACA took effect. Gov. Tony Evers, a Democrat first elected in 2018, has repeatedly sought to expand Medicaid. Just before he took office, however, the Legislature passed and Walker signed a law requiring lawmakers’ approval for the governor to accept expansion. Republican lawmakers have since rejected Evers’ attempts to do so.

Of 10 states that have still not accepted Medicaid expansion, Wisconsin “is on a completely different footing,” said Jason Stein, president of the Wisconsin Policy Forum and the report’s author.

BadgerCare Plus, the Wisconsin Medicaid program for primary and acute health care for individuals and families, covers uninsured children and pregnant women with household incomes up to 300% of the federal poverty guideline. It covers parents and childless adults with incomes up to 100% of the guideline.

By accepting full Medicaid expansion, Wisconsin would raise the parents’ and adults’ income limits to 138% of the guideline while paying less overall.

“In 2024, the state of Wisconsin is paying 39.3% of the costs of covering the roughly 190,000 childless adults currently in BadgerCare Plus rather than the 10% rate available through a full ACA expansion,” the Wisconsin Policy Forum report states.

The other non-expansion states don’t cover childless adults unless they have a disability, and their median income limit for parents to get coverage is 31% of the poverty guideline, according to the report.

The state Department of Health Services (DHS) has calculated that with expansion, about 90,900 state residents would become eligible for Medicaid.

Fewer than a third of that number — about 23,000 people, the Urban Institute and the Robert Wood Johnson Foundation have projected — would be previously uninsured, however, according to the report.

More of them would move from other coverage, such as insurance purchased through the ACA’s health insurance marketplace. While federal subsidies in place through 2025 have lowered the price for low-income consumers buying coverage through the marketplace, the report says Medicaid coverage would offer them lower out-of-pocket expenses and somewhat more robust coverage.

The report also finds that accepting Medicaid expansion could have a larger impact in rural areas, where both the share of uninsured people and the share of people whose incomes fall in the range that Medicaid expansion targets are higher.

About 5% of Wisconsin’s population, or 290,000 people, have incomes between 100% and 138% of the poverty guideline — up to $20,783 for an individual and $35,632 for a family of three in 2024. A third of them are in the state’s three most urban counties: Brown, Dane and Milwaukee.

But in more than 25 rural or mostly rural counties, 6% or more of the residents are in that income range. In Monroe, Rusk and Forest counties, it’s more than 8%.

“In other words, when one considers the share of the population who might benefit from expansion, it becomes clear that the residents of rural counties would be impacted the most,” the report states.

Yet the group of people who are uninsured and the group with incomes of 100% to 138% of the federal poverty guideline don’t overlap much.

As many as 90.3% of state residents in that same income range already have “some form of health insurance coverage,” the report finds.

Those include employer-based insurance, Medicare, and people who have purchased insurance themselves. Just over half are already covered by Medicaid or another public program, according to the report.

“So though Medicaid expansion would decrease the uninsured population in Wisconsin, its impact on coverage levels would be more modest than some might assume,” the report states.

“The biggest surprise to me clearly was the penetration of Medicaid into this target population already in our state,” said Stein. “That was eye-opening to me.”

The higher rural share of both uninsured people and people whose incomes fit the Medicaid-expansion target have implications for the future of rural health care, he added.

“As the the problem of rural health care becomes more acute over time, as health care becomes more difficult to deliver, as the rural population at least in some parts of the state has fallen, and as the demographics of those areas change and people get older and more in need of health care, the question of rural health care becomes very important to us at the Forum, and I think should be important to policymakers and voters as well,” Stein said.

One possible outcome from expansion, the report says, would be to use funds from expanding Medicaid to increase Medicaid reimbursement rates that hospitals and other health care providers have complained are inadequate to cover the cost of care. But that would require specific action by the Legislature and the governor.

“There is an issue with Medicaid reimbursement rates that is important for policymakers to consider,” said Stein. “There is a potential for drawing more resources into the state with Medicaid expansion that could be used to address that first issue. But there’s no guarantee of that.”

Dem. Senate leader blasts GOP lawmakers over rejecting Medicaid boost

In a memo sent out Wednesday, the state Senate Democratic leader took to task Republican lawmakers who have stood against expanding Medicaid.

Sen. Dianne Hesselbein (D-Middleton) solicited two Legislative Fiscal Bureau memos last week. One request asked how much Wisconsin has paid under its Medicaid program compared to what it lost out on by not accepting Medicaid expansion when the Affordable Care Act took effect. Another asked how much the state could get if it expands Medicaid in the coming two-year budget cycle.

By accepting expansion 11 years ago, covering adults with incomes up to 138% of the federal poverty guideline, Wisconsin would have qualified for federal funds covering 90% of the cost. Instead, under Gov. Scott Walker, Wisconsin got permission to cover more adults with incomes up to 100% of the federal guideline, but at the state’s standard federal match, paying 60.7% of the cost.

One of the fiscal bureau memos projected about $1.8 billion from the federal government if the state accepts Medicaid expansion in the 2025-27 budget. The other calculated that over the past 11 years, the state paid more than $2.6 billion that it would not have paid if it had received the full expansion’s higher federal match.

The memo “shows how much this Republican folly has cost Wisconsin taxpayers so far – that total is $2.7 billion of your tax dollars squandered over 11 years they have refused to fully expand Medicaid,” Hesselbein wrote in a press release that she circulated with the memo Wednesday.

Hesselbein’s release came the same day that lawmakers received an advance copy of a new Wisconsin Policy Forum analysis of how accepting federal Medicaid expansion would affect the state and its Medicaid program.

Hesselbein told the Wisconsin Examiner that her fiscal bureau request was one she makes periodically to advance her argument for accepting full expansion, and that she was using it for a column to her constituents.

The request wasn’t specifically timed in light of the Wisconsin Policy Forum report, she said, and the column was one she had been working on.

But when word reached her about the forthcoming report, “I’m like, ‘Let’s just get it out there then.’ Because I don’t want it to look like I’m following what they’re doing.”

She added, “I appreciate the good work that they do. So I just wanted to be like, here’s my take.”