Erpenbach overstates claim that there are 'no strings attached' to federal funds to expand Medicaid

Republicans on the Wisconsin Legislature’s budget-writing committee dashed the hopes of their Democratic counterparts who were looking for the state to expand Medicaid, as Gov. Tony Evers proposed in his upcoming budget. 

Wisconsin is one of a dozen states that has not adopted the Medicaid expansion, which would lean on federal funds to broaden eligibility for the program to people with incomes of up to 138% of the federal poverty level instead of the current 100%. 

Evers initially proposed the expansion in his first state budget, but the provision was quickly stripped out by Republican lawmakers. 

He tried again this year, though Assembly Speaker Robin Vos, R-Rochester, told reporters in March he would not agree to it. On April 30, 2021, the Republican co-chairs of the budget-writing committee announced that the proposal would be among 280 items they plan to remove from the governor’s budget. 

It comes as a blow to Democratic lawmakers who have long pushed for the expansion, including state Sen. Jon Erpenbach, D-West Point. 

In a March 21, 2021 appearance on Capitol City Sunday, Erpenbach said it was time for Republicans to "do the right thing" and adopt the expansion to make tens of thousands more Wisconsinites eligible for BadgerCare. 

This time around, the expansion would come with more than $1 billion dollars in tax savings under a provision of the federal government’s pandemic relief legislation, meant to induce the 12 states that have not yet expanded health care coverage to do so. 

"There’s no strings attached to that money that we’d be getting as an incentive to expand Medicaid," Erpenbach said. 

Is he correct? Let’s dig in. 

By "no strings attached," the senator meant Wisconsin does not have to do anything besides expanding Medicaid to obtain those additional dollars, a spokesperson for his office said. 

The financial incentive to expand eligibility is a temporary 5% increase to the funding Wisconsin receives from the federal government to help pay for Medicaid, which is known as the federal medical assistance percentage, or FMAP. 

Currently, the state receives matching funds for about 60% of the costs of the program, according to a March 9, 2021, memo from the state’s nonpartisan Legislative Fiscal Bureau. States that expanded Medicaid were eligible for enhanced matching funds, and the 5% increase that would come on top of that for two years. 

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The fiscal bureau estimates that Wisconsin would receive incentive funding that amounts to a total savings of a little over $1 billion dollars in the next biennium. If Republicans keep their current stance, Wisconsin will have given up more than $3 billion in federal funds by 2023. 

Whether Erpenbach is on target that there are no strings attached to that money, though, depends on your interpretation of strings.

He’s correct that the state would not have to do anything besides expand the program to get the incentive money — though to be sure, the expansion would take time and effort to accomplish. 

The Kaiser Family Foundation estimates that Wisconsin would "likely see fiscal gain" under expansion, even though it was the only state to partially expand the program without accepting federal help. 

Republicans, on the other hand, see many strings attached to expanding Medicaid and thus receiving the bonus money. 

State Rep. Mark Born, R-Beaver Dam, a co-chair of the budget-writing committee, called the incentive money a "federal bribe … to expand that welfare program" and said private insurance gives people better health care coverage. (We rated False the claim about private insurance vs. Medicaid.) 

Republicans also worry about the consequences of pushing more costs onto health care providers who receive lower reimbursements from Medicaid than they do from private insurance, and have argued that the federal government could backtrack on its financial support of the program at a later date, causing the state to pick up more of the cost. 

And although the bonus money is estimated to offset states’ expansion costs for the first two years, once the FMAP returns to its regular rate, Wisconsin will be responsible for a portion of the program’s costs. 

Erpenbach said there are "no strings attached" to the financial incentive Wisconsin could currently receive from the federal government to expand Medicaid. 

He’s right that there are no hidden strings attached to the money — that all the state would have to do is accept the expansion to receive it. 

Still, there are long-term responsibilities attached to that action, even if there are also long-term benefits. 

Our definition of Half True is that "the statement is partially accurate but leaves out important details or takes things out of context."

That fits here.