Scott Walker says his actions covered everyone in poverty with Medicaid for first time ever

Presenting his alternative to the Affordable Care Act, Gov. Scott Walker bragged that even as he refused federal money under the law to expand Medicaid, he made historic progress in insuring Wisconsin's poor.

"I turned down a Medicaid expansion under Obamacare. And I got to tell you, that was kind of tough in a blue state like Wisconsin. There were even some Republicans that wanted us to grab the money," Walker said Aug. 18, 2015, in a presidential campaign speech in Minnesota.

"But we turned it down because we knew how difficult it would be to repeal Obamacare -- and put patients and families back in charge of their own health care decisions -- if states were adding to it, were expanding underneath it.

"In my state," Walker continued, "even without taking that expansion, we showed that we could get results. I’m proud to say the state of Wisconsin, for the first time in our history -- first time in our history -- everyone living in poverty is covered under Medicaid."

As we'll see, everyone in Wisconsin who is living in poverty -- at least, based on the federal poverty level -- is now covered by Medicaid.

But Walker accomplished that by taking advantage of another provision of Obamacare -- pushing less-poor people off of Medicaid and into the marketplace that was set up under the law, albeit with subsidies to buy coverage.

Moreover, his move meant Wisconsin has passed up more than $550 million in federal money, putting an additional burden on Wisconsin taxpayers.

Turning down federal funds

Walker’s Obamacare alternative was his first major policy initiative as a presidential candidate. It was criticized by Louisiana Gov. Bobby Jindal, a fellow GOP contender for the White House, as offering a "new entitlement" for every American.

We rated that claim Half True. Walker’s plan offers an entitlement -- tax credits to help people who aren’t offered coverage by an employer. But the credits aren’t exactly new, and they’re not available to everyone.

The main intent of President Barack Obama's Affordable Care Act, meanwhile, was to expand coverage to the uninsured in two ways: through tax credits similar to those in Walker’s plan to help moderate-income people buy insurance in the marketplace; and by expanding Medicaid for low-income people, including those with incomes somewhat above the federal poverty level.

That Medicaid expansion is what Walker references in his claim about insuring Wisconsin’s poor.

The Obamacare Medicaid expansion

Medicaid provides health coverage to some 72 million Americans, including 1 million people in Wisconsin. Low-income adults, as well as children, pregnant women, elderly adults and people with disabilities, are eligible. The program is funded jointly by states and the federal government, but is administered by the states.

Under Obamacare, the federal government agreed to pay 100 percent of the Medicaid expansion cost for the first three years, declining to 90 percent in 2020 and beyond.

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A U.S. Supreme Court decision in 2012, however, said states could opt out of the expansion -- and 19 states, including Wisconsin, have done so, according to the Kaiser Family Foundation.

When he announced in February 2013 that Wisconsin would reject the Obamacare expansion, Walker explained his decision in part by contending that the nation's growing debt would prevent the government from paying for the expansion in the future.

Indeed, a year later he claimed that "federal government reneging" on Medicaid payments to Wisconsin had caused about $240 million in extra costs in the 2013-’15 state budget. We rated that claim False. Typical state-federal cost-sharing fluctuations -- not any reversal on a commitment by Washington -- led to higher costs for Wisconsin.   

So, what did Walker do instead of accepting the extra Obamacare money to expand Medicaid eligibility?

Walker’s alternative

As the Milwaukee Journal Sentinel has reported, Walker became the only governor in the country who used the Affordable Care Act to expand access to health insurance while turning down the additional federal dollars available to pay for it.

Most of Walker’s fellow Republican governors opted not to expand their Medicaid programs through the law, thereby creating a "coverage gap" -- some 4 million people nationwide with incomes above Medicaid eligibility limits but below the lower limit for premium tax credits to buy insurance in the marketplace.

Despite rejecting the federal money, Walker still expanded Wisconsin's Medicaid program, and 145,000 people have gained coverage as a result. Wisconsin is the only state, according to Kaiser, without a so-called coverage gap.

Now, childless adults with an income below the federal poverty level — $11,770 — are eligible for BadgerCare Plus, the state's largest Medicaid program.

But adults with incomes above the federal poverty level -- including an estimated 57,000 previously covered by BadgerCare Plus -- are no longer eligible for Medicaid. They can buy subsidized private health insurance in the marketplace set up under the Affordable Care Act.

It’s important to note that the federal poverty level is a benchmark. Arguably, few people would contend that someone with an income of $11,770 a year was living in poverty, while someone with an income slightly above that was not.

Moreover, Walker’s expansion comes with a higher cost to state taxpayers.

The left-leaning Urban Institute estimates that accepting the federal Obamacare dollars to expand Medicaid would have saved $2.5 billion in state dollars from 2015 through 2024. To put it another way, Wisconsin would spend 5 percent less on Medicaid, or an average of $250 million less per year.

Our rating

Walker said he "turned down a Medicaid expansion under Obamacare," but because of actions he took, for the first time in Wisconsin's history "everyone living in poverty is covered under Medicaid."

Under changes made by Walker, everyone in Wisconsin with an annual income at the federal poverty level ($11,770 for a single person) is now eligible for Medicaid. That is the first time in Wisconsin that everyone at or below the federal poverty level is eligible for Medicaid.

But it's important to note that, while Walker rejected the Obamacare expansion of Medicaid, he used another provision of Obamacare to move less poor people off of Medicaid and into the marketplace created by Obamacare. And Wisconsin has already passed up more than $550 million in federal money, putting an additional burden on state taxpayers.

For a statement that is accurate but needs additional information, our rating is Mostly True.