Walker would move thousands of people off of Wisconsin’s Medicaid program. In Wis., Obamacare with a twist

Wisconsin Gov. Scott Walker, avowed Obamacare foe, proposed an ambitious plan Wednesday to cut his state’s uninsured population in half — by getting them covered through Obamacare.

The Republican announced that he is rejecting Medicaid expansion and the billions of federal dollars that would come with it. In fact, he’s proposing a net cut in the state Medicaid program.


Walker would take thousands of people currently on Wisconsin’s relatively generous Medicaid program — people who are above the federal poverty level — and move them into the Obamacare exchange instead, where they can get federally subsidized private insurance. Walker has already said he won’t run the exchange, requiring the federal government to take control instead.

Once that group is out of Medicaid, he’d permit more of the state’s poorest residents to come in. But overall, Medicaid enrollment would drop by about 5,400, according to estimates provided by Walker’s office.

Walker packaged his plan as a responsible effort to cut into the ranks of the state’s uninsured while weaning low-income residents off a reliance on entitlement programs. He took credit for expanding coverage to about 225,000 more people — though the net gain would come through the federal program.

“With these Medicaid reforms, we will preserve an essential safety net for our neediest, while protecting our state’s taxpayers from uncertainty,” Walker said in a statement. The “uncertainty” refers to questions by some governors whether the federal government will live up to its promise to pay for most of the health law’s Medicaid expansion.

Advocates say people are better off in the exchanges, because they would have private insurance and more access to health care providers. But groups like Families USA say that Medicaid is generally a better deal for low-income people, because they are exposed to far fewer out-of-pocket costs.

Walker isn’t the only governor trying to carve out his own approach to Medicaid. A bipartisan pair — Ohio Republican John Kasich and Arkansas Democrat Mike Beebe — are trying to get the Obama administration to approve a type of partial Medicaid expansion which would give them access to the federal funds available to states that expand. The federal government is paying the full cost for three years, then phasing down to 90 percent.

The Department of Health and Human Services has already told states that if they want the matching funds they have to expand Medicaid to cover everyone up to 133 percent of poverty. Some of the states had hoped to expand up to 100 percent — and put those up to 133 percent in the exchanges.

The two states felt that by putting that group in the exchange, the federal government would have to pay the costs — without any uncertainty about whether the feds would eventually dial back their promised 90 percent share of expanded Medicaid costs. The exchange subsidies are federal. Medicaid is joint state and federal.

But since that’s not allowed, Kasich and Beebe proposed an alternative. They would go ahead with the expansion up to 100 percent — and let the next tier, up to 133 percent, choose whether they wanted to be in Medicaid or the exchange. They hoped that bit of extra flexibility and state autonomy would help persuade state legislatures to accept the expansion.

They say the administration has at least been willing to talk about it, although no decision has been made.

“They told us that it’s something that is feasible enough that they’re going to look into it,” said Matt DeCample, a Beebe spokesman. “We want to know if this is a road we can go down.”

HHS officials did not respond to a request for comment.

How people will choose between Medicaid or the exchanges is unclear. Medicaid will be cheaper than private insurance for these individuals, although some may feel a stigma in a health program for the poor.

Politically, it may help win over local lawmakers.

“I think you’re looking at a lot of states that are searching for a way to kind of make it their own model, not just accepting whole cloth what has been [decided by the administration],” DeCample said.

Kasich revealed his interest in a similar plan during a budget rollout last week, in which he offered unusually public details about a conversation with senior Obama adviser Valerie Jarrett. Kasich said Jarrett assured him the White House would consider his request, and he repeatedly praised her for listening.