Amid potential cuts, push for Medicaid expansion in Wisconsin continues 

Caption: Julia Bennker poses outside her home where she runs a child care business. 

State holds unique position in debate over expansion, with low uninsured rate and higher costs for Wisconsin taxpayers

For Eau Claire families, Julia Bennker provides an essential service by caring for nine toddlers. She works with as many children and families as she can, given the scarcity of child care providers in the western Wisconsin community.

By her estimation, she makes around $5 an hour. That qualifies her for BadgerCare Plus, the state’s Medicaid healthcare program for low-income children and adults.

“Child care providers, in general, rely on Medicaid if they’re not married to somebody who has insurance,” she said. “There’s no way to make it work otherwise.”

Bennker wants Wisconsin to join 40 other states and the District of Columbia that took additional federal dollars to boost Medicaid coverage eligibility for low-income adults. Doing so would raise income caps for BadgerCare Plus, which currently limits adult coverage to those making less than the federal poverty level. For a single person, that’s about $1,300 a month.

Democrats and health access advocates have long pushed for Medicaid expansion, a move that would bring in billions in additional federal dollars for Wisconsin and allow BadgerCare Plus to cover tens of thousands more. All of the states neighboring Wisconsin have expanded Medicaid.

Republicans oppose expansion. In early May, GOP members of the Legislature’s budget-writing committee voted to remove the policy from consideration as they craft the state’s next two-year spending plan.

Instead, conservative lawmakers champion the way they designed the program with former Republican Gov. Scott Walker. Under that system, BadgerCare Plus eligibility for adults ends where federal subsidies that make private health insurance more affordable begin.

That system makes Wisconsin unique. Medicaid eligibility in the other nine non-expansion states is below the federal poverty level, meaning low-income adults do not have access to federal subsidies that make private health insurance more affordable. Wisconsin has “no one in the coverage gap,” according to KFF, a health policy think tank.

Wisconsin had an uninsured rate of 4.9 percent in 2023, the lowest among states that have not expanded and lower than most states that have expanded. But Wisconsin foots a bigger portion of the Medicaid bill for covering low-income adults than expansion states.

As Congress and the White House look to trim federal spending to advance President Donald Trump’s agenda, they’re eyeing changes to Medicaid that could reshape the program.

Assembly Speaker Robin Vos, a Republican representing Rochester in southeastern Wisconsin, said that the state’s choice to reject expansion was a “good thing in light of what’s happening.”

“Everyone has to recognize the long-term fiscal stability for our nation is at risk because of the massive deficit that’s been run up under both Republicans and Democrats,” Vos told reporters in February. “Somebody has to finally fix it, and every program is going to have to change if we’re going to do it.”

The state’s Department of Health Services describes Medicaid expansion as the “cornerstone” of its two-year budget proposal. It projects that taking federal dollars to expand Medicaid would lower state healthcare costs by $1.9 billion over the next biennium, which runs from July 1 through June 30, 2027.

The change would set the BadgerCare Plus income threshold at 138 percent of the federal poverty level, about $1,800 a month for a single adult, and expand the program to cover an additional 95,800 Wisconsinites, 21,000 of whom are currently uninsured.

“We just need to make sure that our people in Washington, D.C., understand the importance of Medicaid in general,” Democratic Gov. Tony Evers told reporters in March. “It’s going to be an all-out war to make sure that we get what we need.”

Potential federal funding cuts loom for safety-net program

About 1 in 5 Wisconsinites are enrolled in Medicaid. BadgerCare Plus, the state’s largest Medicaid program, covered around 872,000 in April. The federal government reimburses Wisconsin roughly 60 cents of each BadgerCare Plus dollar spent.

The Affordable Care Act, signed into law in 2010, expanded Medicaid coverage to more low-income adults by widening eligibility up to 138 percent of the federal poverty level, although a 2012 Supreme Court ruling made expansion optional.

The federal government picks up at least 90 percent of the cost of the enrollees.

So far, all but 10 states have opted in. Research links the policy to lower uninsured rates, health improvements and economic benefits, along with more government spending on Medicaid, according to KFF. More than 20 million people nationwide have coverage thanks to expansion.

Some congressional Republicans, who are searching for ways to cut federal spending, have called for reducing the federal match for the Medicaid expansion population. U.S. Reps. Scott Fitzgerald, a Republican who represents many of Milwaukee’s north and western suburbs, and Tom Tiffany, a GOP lawmaker from northern Wisconsin, back a bill to do just that.

“For too long, taxpayers in Wisconsin and other states that made a conservative choice to not fully expand Medicaid under Obamacare have been forced to subsidize a program they do not use,” Fitzgerald said. “It’s time to address this unfair funding structure.”

If Congress cuts Medicaid, Wisconsin would likely have to cover fewer people, fewer services or pay providers less, said Kirsten Johnson, who leads the state’s Department of Health Services, which oversees BadgerCare Plus. She called for Medicaid expansion, as it’s unclear how and whether the federal government will act on the program.

“I don’t know that the House and the Senate will ever agree,” she said at a Q-and-A hosted in April.

She noted that three Republican-led states — Missouri, Oklahoma and South Dakota — have expanded Medicaid through their constitutions, putting them in “dire circumstances” if anything happens to the program federally.

“Certainly, there’s risk,” she said of expansion. “As of right now, nothing’s changed.”

Johnson is concerned about the future of Affordable Care Act subsidies, which the state relies on to provide coverage for lower-income people who would be otherwise covered by an expansion. Federal laws passed to address the COVID-19 pandemic temporarily enhanced those subsidies, and those enhancements are set to expire at the end of the year.

“If those subsidies go away, they won’t be able to afford it, and they will be largely uninsured,” she said. “That will be a huge hit for our healthcare system.”

Proponents say expansion would fill healthcare gaps

Dr. Wendy Molaska has seen how many “fall through the cracks” when it comes to finding healthcare coverage. She runs Dedicated Family Care, a clinic in Fitchburg, a Madison suburb. Forty percent of her patients are uninsured.

Many people who don’t get coverage through their employers, like service industry workers and child care providers, can’t always afford plans available through the Affordable Care Act marketplace, Molaska said.

Even if they can, the health plans may come with high out-of-pocket expenses that lead them to forgo medical care until they can’t.

“If we were able to better expand Medicaid, hopefully, we could get more people in before things get too serious, where then they’re going bankrupt because of their medical issues,” said Molaska, a past president of the Wisconsin Medical Society.

Expansion could help workers who serve people in need of long-term care too. Those services often involve help with daily living, like bathing, getting dressed and making meals, for people with disabilities, those who are getting older or folks with a chronic illness.

In 2023, about 30 percent of providers supplying long-term support services offered their employees health insurance, meaning many of their workers likely have Medicaid and are keeping earnings low enough to qualify for the program, said Beth Swedeen, executive director of the Wisconsin Board for People with Developmental Disabilities.

Few caregivers who work with a state Medicaid long-term care program called IRIS, which allows its members to hire their own aides, receive health coverage through their employers. Many of them — like the people they care for — likely have Medicaid coverage, Swedeen added.

Expansion would allow caregivers to work an extra shift a week in an industry that is facing a shortage of workers, she estimated, and the extra income wouldn’t cause them to lose their Medicaid insurance. Dollars from expansion, which get spent on health care services, could also help raise wages to entice more into the field.

“We have an acute caregiver crisis in the state where we can’t find enough workers,” she said.

Molaska said it’s critical that healthcare providers are reimbursed adequately. Medicaid often pays less than commercial insurance.

“It becomes a little bit of a sticky wicket,” she said. “We can expand Medicaid, but then we need to make sure that the reimbursement is there.”

Healthcare in rural areas may face challenges especially, since there are not a lot of options, Molaska said.

In western Wisconsin last year, two hospitals run by Illinois-based Hospital Sisters Health System closed, one in Eau Claire and the sole hospital in nearby Chippewa Falls. Both served high volumes of Medicaid patients in the area. Democrats have cited the closures in their push to expand Medicaid.

Lower Medicaid reimbursement, compared to private plans, is part of the reason that Republicans oppose expanding the program. State lawmakers do have the power to influence and change such rates.

Senate President Mary Felzkowski, a Republican from Tomahawk in northern Wisconsin, questioned why the state would shift people away from commercial insurance with its higher reimbursement to Medicaid as the state already has a low uninsured rate.

“Medicaid expansion makes zero sense for Wisconsin,” she said.

Compared to peers, state’s biggest gain would be money

The debate over expansion in Wisconsin often obscures the fact that many who would be eligible for coverage already have Medicaid, as BadgerCare Plus provides a way for some parents and caretakers to make more than typical income caps, said Jason Stein, president of the Wisconsin Policy Forum. The nonpartisan, independent policy research organization published a report last year on expansion.

“In terms of the effect on coverage, it’s a smaller change than what would be in any other state that is non-expansion,” Stein said.

That’s in part due to the state’s history of having a generous Medicaid program and low uninsured rate, as well as the unique way it reacted after passage of the Affordable Care Act.

In 2014, the state pursued a partial expansion of Medicaid, rather than the full expansion available under the Affordable Care Act. Policymakers lowered income eligibility thresholds for BadgerCare Plus for parents and eliminated a waiting list for childless adults. That led to a net increase in Medicaid enrollment as more childless adults gained coverage, while tens of thousands of parents and caretakers lost access to the program.

The change also meant the state didn’t qualify for the enhanced federal funding that’s available for those that went the full expansion route.

State taxpayers will have covered about $2.6 billion in costs as of June 30 — when the state fiscal year ends — that federal taxpayers would have otherwise shouldered if the state had expanded Medicaid at the first opportunity in 2014, according to the forum’s report. That doesn’t include a $1.3 billion incentive the state could receive for expanding, thanks to action Congress took under former President Joe Biden to entice states to expand. House Republicans’ spending bill would do away with that incentive.

Funds available through expansion could have gone to any purpose, like strengthening provider reimbursement, funding education or reducing taxes, the forum noted.

But expanding would shift people away from private marketplace insurance, including from Affordable Care Act plans where people receive federal help to afford premiums and copays. The forum estimates that those who would shift from Affordable Care Act plans to Medicaid under expansion benefited from at least $283 million in federal tax credits in 2024.

Overall, Stein said the state has a “relatively good functioning” healthcare system.

“But you also have a lot of needs and you have a lot of additional costs for state government that come out of the status quo,” he said.

State faces a high cost to continue Medicaid program

As state lawmakers work on the budget, they will need to find an additional $1.6 billion to cover the state’s share of Medicaid funding over the next two years. Medicaid expansion could help, said Bobby Peterson, executive director of ABC for Health, a nonprofit that helps people navigate healthcare financing.

“They should use it,” he said. “It’s going for something that’s relatively important and fundamental — that’s healthcare for people.”

Peterson said that taking the federal expansion dollars could help with the “corn maze” of coverage eligibility for low-income families, where some parents might have Affordable Care Act coverage and their kids may have Medicaid coverage due to different eligibility requirements. Families could have different networks, clinics and providers, as well as challenges in navigating the system and staying eligible for programs. Medicaid expansion could make that more seamless.

Progressive advocacy group Citizen Action of Wisconsin is urging Evers to veto a budget that doesn’t include expansion. Executive Director Robert Kraig said there’s widespread support for the policy and that new legislative maps have thinned Republican majorities.

“The maps are such now that the Legislature really could go one way or another in the next election,” he said.

But conservatives remain opposed. Will Flanders, research director at the Wisconsin Institute for Law and Liberty, said Medicaid cannot be immune from discussions about federal spending cuts.

“Medicaid expansion has never been a worse idea than it is right now,” Flanders told reporters in February, after releasing a report warning that a reduction in federal matching rates for states could put Wisconsin in a bind if it expanded.

Stein noted that in 2017, when Republicans last controlled the White House and Congress, there were discussions about changing the Affordable Care Act that didn’t yield significant change.

“This time could conceivably be different,” he said. “At the same time, there’s always a lot of inertia, and making big legislative changes is always difficult.”

Molaska, the doctor in Fitchburg, hopes legislators at least extend Medicaid coverage for new moms to a year after birth, rather than the current 60 days. Supporters of that change say it would ensure continuity of coverage at a challenging time for mothers and their babies. Wisconsin and Arkansas are the sole states that have not extended Medicaid postpartum coverage.

While the state Senate overwhelmingly supports extension, the Assembly has not acted. Vos, the Assembly speaker, opposes it, but said last month his caucus had yet to discuss it.

“Let’s start somewhere and try to work our way to the point where we can help all Wisconsinites be able to access affordable and accessible care, so that they have the healthcare that they need to be able to live their lives, take care of their families and participate in the economy,” Molaska said.

This story is part of “Uninsured in America,” a project led by Public Health Watch that focuses on life in America’s health coverage gap and the 10 states that haven’t expanded Medicaid under the Affordable Care Act.