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President’s Column: The AHCA’s Painful Contradiction

By Eric Borgerding, WHA President/CEO

June 16, 2017

Politics is full of contorted contradictions and inexplicable ironies. For the latest example, look no further than the Obamacare replacement legislation, the American Health Care Act (AHCA). 

For better or worse, Wisconsin rejected Obamacare’s Medicaid expansion. Yet under the House version of the AHCA, Wisconsin will be severely penalized for doing so. Here’s why:
  • Under the AHCA, the bill repealing Obamacare, states that adopted Obamacare’s Medicaid expansion will receive an average of $1,936/person in federal Medicaid funding through at least 2025. The 19 nonexpansion states, like Wisconsin, will receive $1,158/person.
  • Under the AHCA, states that adopted Obamacare Medicaid expansion will receive nearly $700 billion more in Medicaid funding through 2025 than those states that rejected Obamacare Medicaid expansion. That means Wisconsin will receive $37 billion less than if it had adopted Obamacare expansion. That’s over three times what Wisconsin currently spends annually on Medicaid. 
And it doesn’t stop there. Under the AHCA Wisconsin will actually pay for this massive inequity. Here’s how:
  • To his credit, Governor Walker did expand Medicaid by adding 130,000 people below the poverty level to the program. But our version of expansion didn’t meet the Obama administration’s definition of “expansion.” That means Wisconsin spends $280 million per year to cover the exact same population that, under Obamacare and now the AHCA, an expansion state would pay roughly $28 million to cover. That’s a difference of nearly a quarter-billion annually we could use to train more primary care doctors and nurses, improve access in underserved rural and urban areas or reduce Medicaid cost shifting to employers and families…right here in Wisconsin
  • Under Obamacare, Wisconsin’s hospitals are taking billions in Medicare cuts to pay for Medicaid expansion in other states. Under the AHCA, those cuts continue, and Wisconsin keeps paying. 
  • If anyone thinks the solution is for Wisconsin to bite the political bullet and expand Medicaid, forget it. The current version of the AHCA outlaws any new expansions. That means not only would Wisconsin be prohibited from expanding, we will continue paying for those that did. 
I’m not advocating for a redistribution of dollars from the expansion states to the nonexpansion states. Effectuating my preferred definition of “equity” means finding ways to raise states to similar levels of federal Medicaid funding, and there are plenty of ideas on the table. 

One of Obamacare’s most glaring flaws is that it creates winners and losers among the states based upon an arbitrary definition of “expansion.” That is redistribution, and no state has felt the impact harder than Wisconsin. The painful irony here is it’s now the AHCA perpetuating this inequity and making fiscal martyrs of states that rejected the very thing the AHCA is trying to repeal. 

With so much on the line, I believe those who rejected Obamacare Medicaid expansion must assure we are not penalized for doing so. Here is the chance; now is the moment. The AHCA will soon be voted on in the U.S. Senate, where the Republican majority is just 52 out of 100 votes. With a margin that slim, even one GOP Senator can make a game changing, course correcting difference. 
 

This story originally appeared in the June 16, 2017 edition of WHA Newsletter