MADISON — Medicaid expansion would shift up to 30,000 people off the individual health insurance market in Wisconsin, which could lower premiums on that market, according to a new report produced for the state insurance commissioner.
The report, released Tuesday, comes after leaders of the Republican-controlled Legislature said last week they would strip Democratic Gov. Tony Evers' plan to expand Medicaid from the upcoming two-year state budget.
Republicans have said Medicaid expansion could increase the cost of private insurance, weaken the individual market and put the state at risk for paying for additional people on Medicaid if special federal funding falls through.
The Evers administration says Medicaid expansion would cover 82,000 more people, half of whom are currently uninsured, and save the state $324 million over two years while bringing in additional federal dollars for a total $1.6 billion investment in health services.
The new report, from Wakely Consulting Group, an actuarial firm, was produced for the state Office of the Commissioner of Insurance. It says 25,000 to 30,000 people on the Affordable Care Act exchange in Wisconsin would become newly eligible for Medicaid through expansion and would likely shift from the exchange to Medicaid.
More than 200,000 people are on the exchange in Wisconsin.
While some Republicans have said shifting people from the exchange to Medicaid would increase premiums on the exchange, in part because the market would be smaller, the new report suggests the move would have the opposite effect.
"Previous research has shown that Medicaid expansion reduces individual market premiums," the Wakely report says.
It cites previous studies by the Obama administration in 2016 and in the Journal of Health Economics in 2018 saying premiums are 7-11% lower in states that expanded Medicaid than in those that didn't.
“The evidence is clear: states that expand Medicaid see a reduction in the cost of health insurance on the individual market,” Wisconsin insurance commissioner Mark Afable said in a statement. “There is a lot of misinformation being used in this discussion, so we wanted to set the record straight. At the OCI, our goal is to maintain a strong insurance market so that people have more access to affordable, reliable coverage. Medicaid expansion will help us accomplish that goal.”
Republican legislative leaders didn't immediately respond to requests for comment.
A study last month by UW-Madison economists said Medicaid expansion could save $100 million a year, apart from the budget process. In February, a study by the conservative Wisconsin Institute for Law and Liberty said it could cost $600 million a year.
Under Medicaid expansion, the state would extend eligibility for the state coverage to adults who make up to 138% of the federal poverty level, up from the 100% now. The federal government would pay at least 90% of the cost, up from its regular 60% share for most people on Medicaid.
Taking Medicaid expansion in 2014 would have saved the state $1.1 billion through 2019, according to the Legislative Fiscal Bureau.