Hospital Execs: BadgerCare Cuts Would Raise Costs, Close Hospitals

Hospital executives told the legislature’s Joint Finance Committee yesterday that Governor Scott Walker’s Medicaid budget would raise costs for businesses and could result in the closure of rural hospitals.

Walker’s budget would reject federal funding to expand Medicaid and would restrict BadgerCare to adults who earn up to the federal poverty level. Individuals who earn more than $11,490 a year would be expected to get their health care through a new federal health insurance exchange.

But Jeremy Normington, the CEO of Moundview Memorial Hospital and clinics in Adams County, says that shift would raise costs dramatically for hospitals like his.

“It’s no exaggeration for me to say that one of the unintended consequences of these cuts could be the closure of rural hospitals in depressed socio-economic areas.”

The reason, says Normington, is that it will increase the number of uninsured patients his hospital treats. Reedsburg Area Medical Center President Bob Van Meeteren says that’s because those who make just above the poverty level won’t be able to afford the out-of-pocket costs of the federal insurance exchange.

“Exchanges were never intended to serve the lowest-income populations – those earning between $11,500 and $15,300 per year.”

Uninsured or not, Van Meeteren says centers like his will continue to treat these patients, meaning they’ll have to make up the difference somewhere else: “This cost would be shifted to businesses that purchase private coverage.”

Van Meeteren and Normington urged lawmakers to accept federal money so BadgerCare can be offered to individuals who make around $15,280 a year. The nonpartisan Legislative Fiscal Bureau estimates that this would extend BadgerCare to an additional 90,000 people and save the state roughly $100 million in the next budget.