MADISON, Wis. (AP) — Gov. Scott Walker's plan to move more people off state Medicaid plans and onto private insurance through a federal marketplace won't result in cutting the number of uninsured Wisconsin residents in half as promised, an independent analyst said Thursday.
Walker's numbers are inflated because poor people near the poverty line won't be able to afford private health insurance that requires individuals to pay for annual deductibles and other cost-sharing expenses, Bob Laszewski, a Washington-based insurance industry consultant, told The Associated Press after reviewing the Republican governor's plan.
"To me this is crazy policy," said Laszewski, president of Health Policy and Strategy Associates and a frequent critic of President Barack Obama's health care overhaul.
"These exchange plans were never designed for Medicaid-eligible people. They're designed for middle-class people who can afford deductibles and co-pays," he said.
Walker announced on Wednesday he would not be proposing Wisconsin expand Medicaid as allowed under President Barack Obama's health care law, which would have led to an estimated 175,000 childless adults being covered. The federal government would have picked up the tab for three years, with the state eventually paying just 10 percent of the costs.
Instead, Walker proposed lowering the state's Medicaid income-eligibility rate from 200 percent of the federal poverty level to 100 percent. That would make the Medicaid income cutoff for a single person $11,490 a year instead of $22,980. He would also remove a cap on a program for childless adults.
The net effect — between new people coming into the previously capped program and those leaving Medicaid because they earn too much — would be a 5,000-person decrease. But Walker also said because of people purchasing insurance through the exchange, the number of uninsured in the state would drop by 224,580.
Laszewski, along with other health care advocates and supporters of taking the Medicaid expansion, said that number was inflated.
"I haven't seen anything to back that up," added Democratic state Rep. Jon Richards of Milwaukee. "As far as I know, he pulled that out of thin air."
The poorest people kicked out of Medicaid — earning between $11,491 and $15,282 a year — will have a hard time affording even modest premiums for federally subsidized private coverage through the exchange, said Bobby Peterson, head of the public interest law firm ABC for Health in Madison.
Because of that, people losing Medicaid under Walker's plan would simply go without insurance, foisting more costs onto hospitals that will still have to treat them, Laszewski said.
"Everybody's a loser here," he said.
Walker's spokesman did not immediately return a message seeking comment.
Walker has been an outspoken critic of the federal health care law. He described his Medicaid plan as a way to make people less dependent on government for their health insurance.
"I want to have fewer people in the state who are uninsured, but along with that I'd like to have fewer people in the state who are dependent on government," he said when describing the plan at a meeting of the state's chamber of commerce.
Walker refused to have Wisconsin establish its own exchange, the online marketplace for consumers to buy insurance, and has instead joined other Republican governors in deferring to the federal government to set it up. Yet the success of Walker's plan hinges on people accessing health insurance through the exchange.
"There is a certain irony in his embracing it now and us saying 'wait, we have reservations,'" Peacock said.
Laszewski said Walker's plan is convoluted, because the governor tried to appease conservative Republicans who dislike the federal health care law while also making sure more people get insurance coverage.
"It appears he has tried to find a way out of it to placate everybody," Laszewski said. "On the surface, he seems to accomplish that but when you get into the pieces it doesn't seem to make a lot of sense."
Wisconsin Hospital Association president Steve Brenton issued a statement that expressed some support for Walker's plan, but reiterated his organization's concern about having more people without insurance. The WHA supports moving people making at least 133 percent of poverty, not 100 percent as Walker proposed, off of Medicaid and into the exchange.
Walker's proposal must be approved by the Republican-controlled Legislature. Republican leaders were quick to endorse Walker's plan, but changes are almost certain to be made over the next four months as it's debated.
Democrats have already offered a bill to have the state accept the federal money and expand Medicaid, but they are unlikely to find support among Republicans to take that route, especially in the face of Walker's opposition.