Wisconsin Physicians and Privately Insured Subsidize Medicaid

By: Brian Sikma

According to academic studies and healthcare policy experts, Medicaid is putting a tremendous cost burden on Wisconsin physicians forcing them to either accept a loss or make other patients pay for the difference. States across the country are working to determine whether or not they will accept additional Medicaid money made available through ObamaCare. But that money comes with strings attached and that is likely one of the reasons why Governor Scott Walker is likely to announce tomorrow that Wisconsin will not take part in the federal Medicaid expansion.

Wisconsin currently ranks among the 15 worst states in the country for Medicaid physician reimbursement rates. Avik Roy, a healthcare policy expert, has written about physician reimbursement rates and a chart he uses to summarize the situation shows that Wisconsin doctors fare among the worst in the country under the program.

Medicaid pays Wisconsin doctors only slightly more than half of what they charge privately insured patients for the same care. The reimbursement rate of 0.53, or 53%, means that doctors must either absorb 47% of their costs in treating Medicaid patients or shift some of those costs onto privately insured patients. Either way, doctors are being underpaid for their services in the first place.

The Wisconsin Hospital Association and several other medical professional groups have supported expanding Medicaid despite the under payments. In Ohio, a state where a Republican governor is quickly moving to expand Medicaid, the state’s hospital association has backed the expansion. Roy, looking at the data, argues that these healthcare providers are pushing for such an expansion because they think it will help them in the short term:

If the Medicaid expansion goes through, however, hospitals’ ebullience will be short-lived. For every dollar that Ohio hospitals spend caring for Medicaid patients today, Medicaid pays 83 cents. In other words, these hospitals lose 17 cents for every dollar they spend on a Medicaid patient.

Roy explains that when Democrats pushed through ObamaCare, they cut some federal subsidies to hospitals thereby giving hospitals an incentive to push for Medicaid expansion. But even under a Medicaid expansion they will still be losing money.

Another health policy expert has noted that in an op-ed in the Milwaukee Journal Sentinel that the increase in physician reimbursement rates that would come under a Medicaid expansion are only temporary. By the year 2015 the reimbursement rates would drop back down to their present level.

Expanding Medicaid in Wisconsin would have only expanded a program that was set to cost the state millions of more dollars while still not covering the entire cost of providing the healthcare it sets out to provide.

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