Steven Walters
The State of Politics

Medicaid’s Future A Key Campaign Issue

Republicans want big cuts. Democrats don’t. Likely issue in 2018.

By - Jul 5th, 2017 10:25 am
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Governor Scott Walker at the 10th Street Brewery Expansion Groundbreaking. Photo by Jeramey Jannene.

Governor Scott Walker at the 10th Street Brewery Expansion Groundbreaking. Photo by Jeramey Jannene.

The future of Medicaid – the federal/state program that provides health care for one out of every five Wisconsin residents who are poor, elderly and disabled – is now a defining issue in next year’s campaigns for governor and the Legislature.

Republicans in control of the White House and Congress want spending limits and deep cuts in federal payments for Medicaid within three or four years. Those changes are part of Republicans’ plans to “repeal and replace” Obamacare.

Those same Washington Republicans also plan to give officials in each state – the governor and legislators elected in November 2018 – broad new authority over what Medicaid covers and costs.

Wisconsin’s Medicaid program cost $8.6 billion last year – a 31 percent increase in four years and a rising cost curve that’s been called “unsustainable,” especially as more Wisconsin residents retire and age in place. The federal government paid $4.75 billion of that (54.8 percent); state taxpayers paid an additional $2.6 billion (30.3 percent).

In May, 1.18 million Wisconsin residents were enrolled in Medicaid. Almost half of them were children (412,200) and childless adults (149,000).

What care did that $8.6 billion provide? According to the non-partisan Legislative Fiscal Bureau, just three programs – prescription drugs, inpatient and outpatient hospital care, and nursing homes – accounted for more than 30 percent of Wisconsin Medicaid spending last year. Drug rebates offset much of those costs, however.

With that background, what important questions about Medicaid’s future should be asked of Republican Gov. Scott Walker, who will seek re-election next year, Democrats running against Walker, and candidates for the Legislature in 2018?

*If federal aid that paid $4.75 billion of Wisconsin’s Medicaid costs last year is significantly reduced, should state government make up lost federal dollars?

*How should state government make up lost federal dollars?

Traditionally, there are only two ways to make up lost federal aid: Cut spending in other programs (aid to K-12 schools, aid to local governments, tax credits that hold down property taxes on homes, the UW System subsidy, money for prisons, etc.) or raise taxes.

Marquette University Law School’s June 22-25 poll of 800 registered voters included this question: Please list state programs that are most important to you. Pollster Charles Franklin said K-12 schools ranked first, with support from 37 percent of respondents. Although Medicaid wasn’t specifically mentioned, “health care” ranked second, with 25 percent of those respondents citing it as a priority.

When those polled were asked if they would pay higher taxes to support their top priority, Franklin said 59 percent said “yes” if it paid for health care, and 35 percent said “no.”

*Should the number of benefits offered by Wisconsin’s Medicaid program be reduced?

Reducing drug, hospital or nursing home benefits could trigger a political firestorm. Wisconsin now offers all Medicaid benefits authorized by the federal government, with some restrictions. For example, Wisconsin only pays for bariatric surgery to fight obesity in cases of medical emergencies.

One potential Democratic candidate for governor, Madison Mayor Paul Soglin, said in a WisonsinEye interview last week that he would explore other ways to control health-care costs. If he is governor, “I would not cut Medicaid benefits. Certainly not,” Soglin added.

Another likely Democratic candidate against Walker, State Sen. Kathleen Vinehout, said in a recent interview that she favors a “universal” or single-payer health care system.

*To qualify for Wisconsin Medicaid benefits, should some of the 149,000 childless adults be screened for illegal drug use, drug tested and required to work or participate in job-training programs at least 80 hours per month – changes Walker wants federal officials to approve.

Under Walker’s changes, someone on Medicaid who refuses to meet the 80-hour work or job training requirement would lose their benefits after 48 months.

In a statement last month, Walker explained why drug screening and job requirements are needed: “Unemployment is low, and the percentage of people working in Wisconsin is among the best in the nation. [These reforms are] a step in the right direction, and we’re continuing to build on Wisconsin’s legacy as a leader in welfare reform.”

But State Senate Democratic Leader Jennifer Shilling said all health-care changes being pushed by Republicans in Washington would “increase health care premiums and take coverage away from more than 390,000 Wisconsin residents.”

That’s “dangerous, costly and cruel,” Shilling added.

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at stevenscwalters@gmail.com

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