Past ‘expansion’ debate was over issues that aren’t past at all
As the nation tussles about how to rein in the projected spiraling costs of Medicaid, it’s remarkable how much the outlines of the fight resemble those of 2013, when Wisconsin’s Republican legislative majority and governor balked at big federal expansion of benefits.
That’s because the underlying issues touch on still-active fault lines in society.
One concerns the growth of the welfare state.
Back when the Affordable Care Act, dubbed “Obamacare,” was imposed on America, a key demand concerned Medicaid, the ‘60s-era single-payer health care program run by states but funded heavily by federal money. Most states didn’t cover able-bodied childless adults. Obamacare tried to entice them to add such people, all the way up to those earning 38 percent more than the poverty level.
Wisconsin, though, already covered such people up to twice the poverty level. Lawmakers and then-Gov. Scott Walker pared it so childless adults were covered up to the poverty line. Above that, they were sent to buy private insurance on the other feature of Obamacare, the subsidized “exchanges.”
Now, alone among 10 states that didn’t expand Medicaid, Wisconsin has no gap between eligibility for Medicaid and for Obamacare exchanges. That’s why estimates find that most Wisconsinites who’d be moved to Medicaid if the state expanded eligibility up the income scale already are covered.
Republicans accomplished Obamacare’s stated aim of helping the uninsured while refusing its method: adding more dependents to a single-payer government program.
“The goal of the Democrat Party is to put people on government insurance. That’s what they want,” said U.S. Rep. Glenn Grothman, the Greenbush Republican who was in the Wisconsin Senate in 2013. By contrast, he said, Republicans want to reintroduce free-market incentives to a health care system largely purged of them, using consumer-driven care and price transparency to control costs.
Putting health care in government hands does not solve the cost problem, he said. “And what does the government do well? Nothing. Nothing, and everybody knows it.”
Costs, work and justice
Restraining Medicaid’s costs are central to congressional Republicans’ budget reconciliation bill, the “one, big beautiful” effort to, among other things, reform Medicaid. After the Obamacare expansion, the program has swelled to become one of the federal government’s largest, and it now covers more than a quarter of Americans.
Critics suggest the bill will throw needy people off the program, but the greatest effect on enrollment, according to nonpartisan federal projections, would come from enforcing rules requiring able-bodied childless adults to work, look for work or study at least half-time.
“People who are disabled do not have to worry,” said Grothman. “People who are doing 20 hours a week of even volunteer work do not have to worry. People with children do not have to worry.”
Work requirements met with strenuous objections a decade ago in Wisconsin, too, when Walker and Republican lawmakers sought and won federal permission to make able-bodied childless Medicaid recipients work or look for work. The Evers administration killed that in 2021.
Walker, writing this week at The Hill, said Wisconsin was ahead of the nation on the issue, and he discusses work requirements less as a matter of cost than of moral justice. “True freedom,” he writes, can’t come from enrolling people on government aid but “from empowering people to control their own destiny through the dignity of work.”
The issue, said Grothman, is that liberals simply don’t seem to believe that generous welfare programs lacking work requirements will discourage people from working. When he said as much to a recent town hall near Oshkosh, protesters shouted in refusal.
“They must not be dealing with normal people,” he said. “How could they be so blind?”
“I don’t know if Democrats don’t get out to talk to normal people, or what the problem is.”
In fact, surveys of how Medicaid recipients spend their time find that those who aren’t working mostly fill their freed-up hours with television and video games, on average an additional 125 hours a month, according to the American Enterprise Institute.
Fiscal risk
The most substantive complaint critics now make about Wisconsin Republicans’ decision in 2013 and ever since not to expand Medicaid is that it means less federal aid coming into the state.
The way Obamacare enticed states to add childless adults to the rolls was to agree to pay 90 percent of the cost of covering them. The feds pay about 60 percent of the cost of anyone else on the program.
By failing to add more above-poverty Wisconsinites to the program, critics say, Wisconsin has forgone billions in added federal aid.
But the federal share of Medicaid comes from Wisconsinites, just via a different tax return and after a round trip to Washington. Instead of sparing taxpayers, expansion would simply free up money already in Madison’s hands for “other needed investments from infrastructure and the environment to local government and schools,” as a 2023 critique put it.
Wisconsin Republicans in 2013 warned that the higher federal matching rate wouldn’t last, and Walker reiterated the warning in his essay. Indeed, congressional Republicans discussed phasing down the 90 percent rate. That reform hasn’t made it into the reconciliation bill, so far. But the version passing the House would end the extra incentive for expansion that was added atop that during the Biden administration.
The possibility of a phase-down is real enough that the Kaiser Family Foundation is estimating how much states would lose in federal funding — $14 billion in Minnesota, for instance.
Wisconsin, of course, would lose nothing.
Even if one isn’t moved by rising dependency, bigger government or the appalling waste of human potential, that immunity to fiscal disaster is enough to make Wisconsinites think: Thank God Republicans had a spine.
Patrick McIlheran is the Director of Policy at the Badger Institute.
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