Wisconsin Budget

Obamacare “Fixes” Will Shortchange Wisconsin

Latest GOP approach is bad news for this state and others.

By , Wisconsin Budget Project - Jul 25th, 2017 10:02 am
Donald Trump. Photo from whitehouse.gov.

Donald Trump. Photo from whitehouse.gov.

The legislation to repeal and replace the Affordable Care Act (ACA) can’t be fixed, but Senator McConnell and President Trump are still trying to revive it. McConnell plans to have a vote on July 25 on a procedural measure to initiate floor debate on the bill.

The conclusion that the bill isn’t fixable is reinforced by the badly flawed amendments that have been suggested as ways of getting a few more Senate Republicans to vote for the bill. One of the many problems with the following amendments is that each of them would adversely affect Wisconsin:

1) The Cruz amendment removing protections for people with pre-existing conditions – One of the amendments that was recently proposed and is intended to shore up the support of conservative Senators is a proposal by Senator Cruz that would segregate the insurance market in a way that would cause sharply higher premiums and deductibles for people with pre-existing health conditions. The Cruz amendment would allow insurers to offer insurance plans that don’t comply with consumer protections – such as the requirement to offer comprehensive benefits, and the ban on pre-existing condition exclusions – as long as the insurer offers at least one compliant plan.

Like a number of other insurance organizations, the Blue Cross Blue Shield Association said the Cruz amendment was “unworkable” and would “undermine preexisting condition protections, increase premiums and destabilize the market.” That would be particularly problematic for Wisconsin because we have a higher participation rate than most other states in the subsidized ACA Marketplace for private insurance plans. 

2) Adding $200 billion for expansion states – One of the latest proposals is a vague plan to create a very substantial fund to increase subsidies for private insurance in the 31 states that expanded Medicaid coverage for adults to at least 138% of the federal poverty level. There are many problems with this $200 billion proposal, including the fact that it would do nothing in the non-expansion states to help the low-income adults who can’t afford the bill’s increased premiums and deductibles for Marketplace plans. Although the proposed assistance to the expansion states wouldn’t have a direct adverse effect on our state, it would indirectly hurt Wisconsin and other non-expansion states because it would tie up a very large sum of federal funding that otherwise could help people in all states.

3) Increased Medicaid funding for hospitals in non-expansion states, except Wisconsin – Another recent amendment is aimed at winning over Senators in non-expansion states by adding $10 billion over 5 years to provide relief in those states to hospitals that serve a disproportionate share of low-income or uninsured patients. However, it appears that the formula that would be used to allocate those funds among the 19 non-expansion states is likely to exclude Wisconsin because it’s aimed at states with lower uninsured rates.

Even before these changes were added to the bill that is expected to be voted on this week, it appeared that Wisconsin’s Medicaid program would suffer. One of the reasons for that is that the new allocation formula would permanently lock into place Wisconsin’s relatively low level of federal funding for Medicaid.

Early this year, some influential Wisconsinites seemed to think that changing the structure of Medicaid financing might be a good idea because it offered an opportunity for politicians like Paul Ryan and Reince Priebus to at long last boost the relatively low level of total federal funding that comes into Wisconsin. I think that was probably an unrealistic expectation, as well as a seriously flawed rationale for changing the Medicaid program. In any event, it has become pretty clear that the House and Senate versions of the Medicaid changes, and particularly the most recent Senate changes, will threaten access to quality, affordable health care in Wisconsin.

Changes to Medicaid and the ACA should be evaluated based on their overall merits or demerits, not primarily through the lens of how they will affect our state. But for those who do evaluate the proposed legislation based on how Wisconsin will fare in the funding allocations, that consideration is one more reason to oppose the bill.

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