Healthcare Will Not Escape Impact
of TABOR Proposals
Director of Government Relations, Froedtert Hospital
Legislators in Madison have spent much of the spring considering versions of a constitutional amendment known as the “Taxpayer’s Bill of Rights” or TABOR. The measure, essentially a constitutional cap on state spending, requires the approval of two successively elected legislatures and the citizenry in a statewide referendum.
While the concept — limiting spending and taxes — seems attractive, TABOR could have serious consequences for healthcare in Wisconsin.
Demographic trends indicate that growing numbers of Wisconsinites will begin to access care through Medicaid programs like the SeniorCare Prescription Drug program and long term care. The combination of spending caps and a growing need for services could lead to further cuts to already low provider rates or reductions in eligibility. Because the proposed measure would be included in the Constitution, changes to address unanticipated consequences would be difficult and would take at least three years.
As you think about TABOR, please consider the following:
- Wisconsin’s Medicaid payments to hospitals are already near the bottom— approaching 58% of cost and already the third worst in the country. Payment rates would likely get worse, not better, if TABOR were adopted.
- Because Medicaid dramatically underpays for care, hospitals, physicians and other providers must shift unpaid costs to private sector employers and employees. The resulting “Medicaid hidden tax” adds to the cost of employer health insurance each year.
- In Wisconsin, about 11.2% of state expenditures are devoted to Medicaid—this is about half of the national average of 20.5%. Over the past several years, the Legislature has approved several program expansions, including BadgerCare and SeniorCare. Before TABOR can be adopted, these programs must be fully and adequately funded.