Medicaid would return to its “intended purpose as a safety net for the neediest” by shifting some people off the program, adding others and refusing the full expansion allowed under federal law, according to Gov. Scott Walker’s proposed budget for 2013-15.
The budget would also boost spending for mental health, rural health, nursing homes and a statewide medical imaging project at UW-Madison.
Walker plans to shift 87,000 parents with incomes above the poverty level — $11,490 a year for a single person — from Medicaid to a federal exchange, a government-subsidized private insurance market starting next year. The coverage would cost them about $19 a month, plus co-pays and deductibles.
Walker would let 82,000 childless adults with incomes under the poverty level gain Medicaid coverage.
His proposal would cut $17 million through Medicaid program changes but increase state funding for Medicaid by $664 million because of routine cost increases, federal cuts and new requirements.
Overall, the exchange — which Walker opposed, along with other parts of the federal health care law — would help reduce the state’s uninsured population by nearly half, to about 253,000 people, according to the budget.
But Democrats and health care advocates say the budget would leave more people uninsured, leading to higher state costs.
“A significant percentage of them just aren’t going to be able to afford the cost-sharing of the exchange,” said Jon Peacock, research director of the Wisconsin Council on Children and Families.
The state could save $254 million through 2020 by fully expanding Medicaid, according to a Legislative Fiscal Bureau report last week. The federal government would pay the full cost of adding about 175,000 people through 2017, after which funding would drop to 90 percent.
Rep. Jon Richards, D-Milwaukee, said Walker’s decision to reject additional Medicaid dollars means “health care is going to become a lot more expensive, and it may become unobtainable.”
But Walker said the deal is too risky for the state, which typically pays about 40 percent of Medicaid expenses, with the federal government picking up the rest.
“If they cannot fulfill their current obligations, what makes us think the Congress and administration can cover even bigger costs in the future when they are sitting on a $16.5 trillion debt?” Walker asked.
Walker’s budget also would:
• Provide about $30 million more for mental health services, including $12.5 million for two more treatment units at Mendota Health Institute.
• Invest $20 million in rural access to health care, including $7.4 million for Medical College of Wisconsin campuses in Green Bay and Wausau.
• Increase reimbursements to nursing homes by $10.4 million, or about $26 million overall.
• Give $3.75 million to the Wisconsin Oncology Network of Imaging Excellence, an effort by the UW Carbone Cancer Center to expand imaging services at 17 sites around the state.
— State Journal reporter Dee J. Hall contributed to this report.