Despite repeated attempts by Wisconsin Gov. Tony Evers to expand Medicaid in the Badger State, state lawmakers have defeated the bad idea, once again.
Medicaid expansion is nothing more than a wolf in sheep’s clothing. Yes, it is enticing to offer more government goodies with so called “free federal money.” But, the reality is that Medicaid expansion is only a temporary “solution” to a much bigger problem. Moreover, when states take the bait to boost their budgets temporarily, taxpayers are left on the hook over the long-term.
Like many states, Wisconsin Democrats have been pushing for Medicaid expansion for years. Such is why on May 19, Gov. Evers called for a special session to expand Medicaid. Perhaps Evers was optimistic his scheme would work this time because the federal government is offering increased Medicaid expansion payouts under the COVID-19 stimulus package.
If passed, this would have expanded Wisconsin’s welfare rolls substantially. According to some reports, had Wisconsin gone forward with Medicaid expansion, 91,000 new Wisconsinites would have been eligible for the state’s Medicaid program, known as BadgerCare Plus.
Furthermore, because the federal funding is not permanent—it would only be guaranteed for two years—tens of thousands would leave the private sector insurance market to jump ship to a state-based system that is severely underfunded.
The problem, from a budgetary standpoint, is twofold. For starters, it’s simply not free money. Every dollar spent by Washington is a dollar earned somewhere else. It matters not that the dollar was earned in Idaho, it is still a dollar extracted from taxpayers who are already shouldering a $28 trillion national debt. It is fundamentally immoral to continue to promise an entitlement when funding is not guaranteed in out-years and will necessarily require either cuts to the entitlement or additional debt load.
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The second and related problem is the fungibility of money in a state government budget. Infusing a state budget with federal dollars allows politicians to channel funds that would otherwise be spent on low-income health care provisions and redirect them to other priorities, say, K-12 education. In the (likely) event that the federal dollars evaporate per the point above, then in out-years, you again will have to make deep cuts to cover the now-gone federal dollars. The domino effect doesn’t stop at the first shortfall but will ripple throughout the entire state budget.
The GOP in Wisconsin knows this. Gov. Evers knows this. The difference is that Evers is using it as a present-day and future political cudgel. And it’s gross, reckless, and immoral.
Fortunately, Republicans scoffed at Evers’ request and quickly shot down the latest push for Medicaid expansion. Republican Assembly Majority Leader Jim Steineke and Senate President Chris Kapenga said in a joint statement, “This is a thinly-veiled political maneuver.”
The decision to expand Medicaid in Wisconsin is poor public policy and unnecessary. Wisconsin does not currently have a large health care coverage gap. And low-income residents are already eligible for Medicaid or Obamacare in Wisconsin. Expanding Medicaid would simply shift a huge number of Wisconsinites onto a government program that is severely underfunded.
The negative impacts of expanding Medicaid are already causing major problems for several states. A recent study of Medicaid expansion in Arizona by the Goldwater Institute notes, “Prior to Medicaid expansion in Arizona, cost-shifting to private payers to offset underpayments and losses from Medicaid and the uninsured amounted to 14 percent more than the hospitals’ costs, or around $1.4 billion in 2007. In 2016, three years into expansion, the costs funded by private payers increased to around 27 percent above hospitals costs, or approximately $2.1 billion.”
Forcing Americans on private health care to subsidize the costs of Medicaid expansion is unfair and only skews the dysfunctional health care market even more. State lawmakers should continue to resist Medicaid expansion and consider actual free-market solutions instead.
Thankfully, Wisconsin Republicans killed Medicaid expansion again. However, the left’s push for more government intervention in health care never stops. Medicaid expansion is merely a steppingstone to full-fledged government-run health care.
Our health care is one of the most personal and consequential aspects of our lives. After the past year of dealing with the pandemic, I, like many Americans, want government as far away from my health care as possible.
Christina Herrin (cherrin@heartland.org) is government relations manager at The Heartland Institute, a nonpartisan, free-market think-tank headquartered in Arlington Heights, Illinois.
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