I'll give you the national picture first, and then narrow it down into the case of Wisconsin, which is one of those stupid states that hasn't taken the expanded Medicaid funding. Basically, the Commonwealth Fund points out that the federal government will be picking up a big chunk of expenses that states usually pick up, and it would be ridiculous for states not to take advantage.
We find that the Medicaid expansion will be a relatively large source of federal revenue to state enterprises. The value of new federal funds flowing annually to states that choose to participate in the Medicaid expansion in 2022 will be, on average, about 2.35 times as great as expected federal highway funds going to state governments in that year and over one-quarter as large as expected defense procurement contracts to states.So the Commonwealth Fund is basically pointing out that not taking the expanded Medicaid funding is a fiscal loser, and the reason why is that it leads to a huge increase in the share of the expenses that the feds will take on.
No state would experience a positive flow of funds by choosing to reject the Medicaid expansion. Because the federal share of the Medicaid expansion is so much greater than the state share, taxpayers in nonparticipating states will nonetheless bear a significant share of the overall cost of the expansion through federal tax payments—and not enjoy any of the benefits.
The Affordable Care Act includes a substantial expansion of eligibility for Medicaid. Beginning in January 2014, all documented residents under 65 years of age with incomes below 138 percent of the federal poverty level and who live in states choosing to participate in the expansion will be eligible for Medicaid.So under current law, Wisconsin taxpayers have to pick up another 42% of costs for the next 3 years, and 32% between 2016 and 2020, all because Scott Walker and the GOP refuses to take this expanded funding for Medicaid. If states don't want to make up all that money, they then have to reduce benefits and/or cut people off of services, which is certainly going to happen for tens of thousands of Wisconsinites that aren't in poverty, but are barely getting by.
In states that do not participate in the expansion, analysts anticipate that some people already eligible for Medicaid who have not participated in the past will enroll. The federal government will fund a share of Medicaid costs for these participants who meet eligibility levels that predate the Affordable Care Act. The share is determined by states’ current federal medical assistance percentages (FMAP), which range from 50 percent in Connecticut and New Jersey to 73 percent in Mississippi. (Wisconsin's FMAP has been estimated to be around 58%) In states that choose to participate in the Medicaid expansion, Medicaid eligibility will expand to cover more people. Between 2014 and 2016, the federal government will pay 100 percent of the Medicaid costs for these newly eligible enrollees, declining to 90 percent by 2020.
The Commonwealth Fund estimates just how much states that don't take the expansion would be giving up by 2022, along with the resulting outflow of federal taxes and payments to other places that would result.
Not surprisingly, Texass is the worst-off of the Bagger states that refuse the Medicaid funds, as they'd be giving away nearly $9.6 billion in federal funds by 2022, and having $9.2 billion in Texans' federal taxes flowing to other states as a result of this decision. Florida is second, at giving away $9.6 billion in federal money, and having $5.0 billion in federal taxes go elsewhere. And Wisconsin is not immune from this.
Result of not taking Medicaid funds, Wisconsin, 2022
Loss of federal funds- $1.75 billion
Wisconsin fed tax dollars going elsewhere- $1.85 billion
And here's the real kicker. Know what Wisconsin's cost in 2022 would be to gain that $1.75 billion in federal funding? and keep the $1.85 billion in federal dollars here? $56 million. That's a 30 to 1 payoff on investment. I think I'd take that trade if I was a lawmaker.
Lastly, the lame argument from righties about "We can't be sure if the expanded Medicaid funding goes away" falls extremely flat. As the Commonwealth Fund brings up, Federal Highway Transportation Funds to Wisconsin are estimated at $967 million for 2022, but Wisconsin is counting on federal funds to pay for the Zoo Interchange, I-90 and I-94 expansion over the next few years. Heck, Walker borrowed huge amounts of funds for these highway projects and refused to raise the gas tax in the process, but you never heard any concern about backing off and playing it safe in case the feds stop giving so much help to build the interstates.
Likewise, the 2013-15 state budget estimates that the UW System will receive nearly $3.7 billion in federal funding over two years. With the sequester particularly scheduled to hit federally-funded research, it could easily be argued that the UW System's federal funding is much more at risk than the expanded Medicaid funding for the next 2 years. In fact, the GOP Legislature criticized the UW System claimed these types of uncertainties led them to set aside large amounts of funds in case other sources started to run out. Somehow this comparison is never brought up to Gov Walker when he tries to spread the line of BS that "Well, maybe we won't continue to get a 90% or 100% match on Medicaid."
So here's more proof that refusing to take the ACA's Medicaid funds is another pig-headed Walker decision, and it recalls the foolishness of not taking stimulus funds to contribute to a rail line between Chicago, Milwaukee, Madison and the Twin Cities. Both of these decision are fiscally irresponsible follies that have not lowered Wisconsinites' taxes, have not helped the services available to Wisconsinites, and is leaving our state behind our neighbors, who had the foresight not to pass up a good thing just because Obama favored it.
In fact, it seems to have only served to impress the miniscule, aging talk-radio listeners and other bubble-worlders that apparently matter most to Scott Walker, at the detriment to everyone else. And that's something that should be hung around his neck for the next 11 months between now and Election Day 2014, along with every GOP Legislator that rubber stamps this idiocy. And yes, EVERY GOP IN THE ASSEMBLY voted to table an amendment that would have taken the expanded Medicaid funding.
Right on as usual.
ReplyDeleteWould it be correct to say not taking the Medicaid expansion money in Wisconsin is federal money sent to other states, similar to the federal money we did not take for the train?
I 'd say it is, which is why I made the train comparison. MAYBE with Medicaid you could claim a deficit reduction (this was not the case with the train, as the money went elsewhere), but I'd say that's more than offset by the loss in the economy from having people be either uninsured or under-insured, because that reduces economic security, and lowers economic activity.
ReplyDeleteAnd oh yeah, caring for and insuring the sick and the poor is also the right thing to do. There is that.
Wisconsin being to a reasonable approximation 1/50th of the USA's economy and population, for every $1 in Federal funding Walker turns away our share of Federal taxes (or equivalently, debt liabilities) reduces by 2¢ as a result. So we collectively lose $0.98 in that.
DeleteDon't forget that adding to our losses are the $73 million to be shelled out to placate hospitals for the losses they'll make on uninsured people not paying their ER bills over the next 18 months of this budget biennium.
Then because failure to expand Medicaid increases private insurance costs 8-10% in some states, and private insurance is roughly 8% of the economy, we're looking at something akin to $1.5 billion/year in avoidable private insurance costs.
"it could easily be argued that the UW System's federal funding is much more at risk than the expanded Medicaid funding for the next 2 years"
It is really, really easy to argue: Medicaid is mandatory federal spending, education is discretionary (as is transportation). It'd take an unvetoed Act of Congress to prevent Medicaid expansion money from arriving, which is impossible before 2017 (and not very likely after then).
"Well, maybe we won't continue to get a 90% or 100% match on Medicaid [and have to make up the difference ourselves]."
The big problem with this Walker argument is that it ignores SCOTUS precedent. The only reason he got to choose about Medicaid expansion is that the ACA's making continuing existing Medicaid funding contingent upon states eventually picking up 10% of the tab for expanded Medicaid was ruled to be unconstitutionally coercive. The Feds can't change the rules to (eventually) push 10% of costs onto the states without violating the Constitution. If Walker is truly afraid of 90% funding perhaps maybe possibly being shifted to Wisconsin without us being able to do anything about it then he's delusional.
On the subject of Medicaid expansion, since 45,000 deaths are attributable to lack of health insurance each year out of 47 million uninsured folk, the morbidity of not having insurance is about 1 in 1,000 each year.
If the December one-bill special session keeps 83,000 poverty-stricken Wisconsinites off the Medicaid rolls for three months (below 100% of the FPL you don't qualify for exchange subsidies owing to the ACA's assumption that all states would be expanding Medicaid). Substitute Amendment 2 would have seen these 83,000 Wisconsinites covered at zero cost to the state and was therefore tabled on a party line vote.
20 Wisconsinites will die as a result.