AHCA Medicaid Funding Disparity For Wisconsin: $36.9 Billion Less

New report shows nonexpansion states at significant funding disadvantage

June 09, 2017

A new report released this week documents significant funding disparities between Medicaid so-called "expansion" states when compared to "nonexpansion" states over the next decade under the current version of the American Health Care Act (AHCA). The 19 states that opted out of the Affordable Care Act’s full expansion for Medicaid, including Wisconsin, will receive $680 billion less than expansion states. Wisconsin’s portion of that total is estimated at almost $37 billion over 10 years.

"The report is eye-opening and should be of concern to anyone in a nonexpansion state," said Eric Borgerding, president/CEO, Wisconsin Hospital Association. "While the AHCA did attempt to provide a measure of relief to nonexpansion states like ours, clearly it is insufficient and must be addressed by the U.S. Senate during their deliberations."

The report released by the Missouri Hospital Association takes into account the various structural Medicaid funding provisions in the AHCA over the next decade—such as the move to per capita spending caps—and other provisions meant to lessen the disparity for nonexpansion states. The latter includes eliminating Medicaid Disproportionate Share Hospital payments cuts two years earlier for nonexpansion states than for expansion states as well as a $10 billion safety net fund.

The report details that even with all of these provisions in mind, expansion states will see an average of $1,936 per beneficiary compared to $1,158 per Medicaid beneficiary in nonexpansion states over the next 10 years. The disparity is a result of using 2016 as a base year when establishing the AHCA’s per capita cap rates, which locks in the significantly enhanced federal Medicaid matching funds for expansion states. This means enhanced funding continues forward at those higher rates while nonexpansion states will not recover from their disadvantaged financial position.

"The unique Wisconsin model has worked to significantly reduce our uninsured rate, and we can be proud to say that everyone in poverty is covered under Medicaid," said Borgerding. "Unfortunately, this report shows that Medicaid funding disparities are baked into the AHCA and will place our state at a significant disadvantage long-term. Ironically, nonexpansion states are essentially being penalized for rejecting ObamaCare in a bill that is repealing ObamaCare."

Borgerding’s comments are similar to those made by Sen. Alberta Darling and Rep. John Nygren, Co-Chairs state Legislature’s Joint Committee on Finance, in a February 24, 2017 letter they penned to members of the Wisconsin Congressional delegation. And earlier this week, Rep. Nygren reiterated his concerns with unfair treatment nonexpansion states like Wisconsin are receiving in nation’s capital.

"One of the frustrations I have had with the proposal coming out of Washington is that it didn’t reward states like Wisconsin that did it the right way and basically continues to reward the states that went a different course," Nygren said this week at a Wisconsin Health News panel discussion (see related story below). "To me, that is continuing this inequity moving forward, rather than addressing the states that have everybody in poverty covered."

WHA continues to urge Wisconsin’s two U.S. Senators, Ron Johnson and Tammy Baldwin, to fight for Wisconsin and ensure Medicaid funding equity under any proposals acted upon by the Senate.

This story originally appeared in the June 09, 2017 edition of WHA Newsletter