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Tuesday, January 27, 2015 |  Madison, WI: 24.0° F  Fog/Mist
The Daily
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Health care ruling gives Gov. Walker wiggle room to block Medicaid expansion
Peterson: 'The free marketeers in the Walker administration might say ''no, we can weather that storm.''
Peterson: 'The free marketeers in the Walker administration might say ''no, we can weather that storm.''
Credit:James Edward Mills

Health care advocates roundly cheered the U.S. Supreme Court decision on the Affordable Care Act Thursday morning, but the court did leave open the possibility that Gov. Scott Walker could go rogue and refuse to implement part of it, potentially denying half a million people health care in Wisconsin.

"This is great news for Wisconsin, both for the half a million people in the state who are uninsured and those of us who have insurance and now have much more certainty it will cover us when we have a serious illness," says Jon Peacock, research director at the Wisconsin Council on Children and Families.

"We were prepared for the worst and hoping for the best," says Bobby Peterson, executive director of ABC for Health. "This is about as good as you can get with this court. We're moving forward."

But, Peterson notes the court's ruling wasn't a total victory. The state could still take actions that would continue to leave many without insurance. There are roughly 500,000 to 600,000 people in Wisconsin currently without insurance, about 10% of the population.

The court upheld the most controversial part of the law -- a mandate that people have insurance or pay a penalty -- ruling that the mandate is equivalent to a tax and legal. However, the Affordable Care Act (known derisively as "Obamacare" by opponents) also calls for expanding Medicaid to 133% of the poverty level in order to help people who can't afford insurance to comply with the mandate.

As written, the act has a series of sticks and carrots for states to expand their Medicaid programs, beginning in 2014. The biggest stick was a threat to take away all of a state's Medicaid money -- in Wisconsin, roughly $4 billion -- if it doesn't comply. The Supreme Court ruled that the federal government cannot do that.

This part of the Supreme Court ruling gives the Walker administration more wiggle room, if it wants, to defy the mandate to expand Medicaid. Says Peterson: "The state could go its merry way and have all those people remain uninsured."

Walker spokesman Cullen Werwie, in an email response, writes: "Premature to comment on the Medicaid part, we have to evaluate its impact on Wisconsin citizens."

Peterson fears the Walker administration will snub its nose at the act. "The free marketeers in the Walker administration might say 'no, we can weather that storm,'" he says.

Peacock remains hopeful the carrots in the Affordable Care Act will be enough to encourage the state to expand its Medicaid programs. "I'm optimistic that when we analyze the options rationally, we'll see the additional funding that's provided will make it relatively easy to expand coverage."

The main carrot is funding. For the first three years the act is in place, 2014 through 2016, the federal government has promised to pay 100% of the costs for new Medicaid enrollees added by the act. (For current enrollees, the state now pays 40%; the feds 60%.) After 2016, the federal contribution drops to 90%.

Peacock argues expanding Medicaid would greatly reduce health costs for everyone, because everyone would have preventative care and uninsured people would no longer be going to the emergency room when they're sick, which drives up costs for those who have insurance. "The costs are spread to all of us as it is," he says. "We think it's much more logical to accept the federal assistance."

If the state doesn't expand Medicaid, would the poor be forced to pay a tax penalty to the federal government for not having insurance? That's a good question, Peterson says. "My guess is that there would be some sort of ruling by the IRS for states that aren't complying," he says. "It seems reasonable to say you're not going to be penalized if you're living in state without Medicaid expansion."

For the moment, Walker remains defiant. In a news release, he says:

Wisconsin will not take any action to implement ObamaCare. I am hopeful that political changes in Washington D.C. later this year ultimately end the implementation of this law at the federal level.

If there is no political remedy from Washington and the law moves forward, it would require the majority of people in Wisconsin to pay more money for less health care. Additionally, it would increase the size and cost of government, decrease the quality of health care and, in our state, reduce access for those truly in need of assistance.

Former Gov. Jim Doyle, in a press conference today, said there's no chance Walker will get his wish. "There's still a lot of political games to be played," said Doyle, who during his tenure expanded state Medicaid programs. "But this is the law and there's no way the Republicans are going to have 60 votes in the Senate to repeal this law."

Walker has already rejected $38 million in federal aid to help prepare for another element of the act, setting up a health insurance exchange to help people buy insurance and help insurance companies comply with the law.

Doyle said insurance exchanges are a conservative idea. "The exchange was a Republican idea, it's one the Republicans have largely supported, it's a free market non-governmental take over... that prohibits insurance companies from cherry picking the healthy people and leaving everyone else on their own."

If the state doesn't set up an exchange, the federal government will do so. Peacock says it'd be better for Wisconsin to do it, because it knows the regional market better.

Despite the Supreme Court ruling, much remains uncertain about health care reform, both nationally and in Wisconsin. Peterson offers this advice: "Celebrate now but keep up the work."

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