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State officials won't say whether they will expand Medicaid through federal health reform until Gov. Scott Walker releases his budget, likely in February, health services secretary Dennis Smith said Wednesday.

But Smith, who will testify Thursday before Congress about the Medicaid expansion and other parts of the federal health law, said an expansion would be costly.

The federal government would initially pay the entire bill for about 22,000 people expected to sign up for BadgerCare Plus, he said. But the state would have to pay about 40 percent of the cost for 113,000 or so new enrollees, he said.

"The math just is not going to work out," Smith said on a conference call with reporters.

Smith said he didn't have a cost estimate for the Medicaid expansion, made optional by the U.S. Supreme Court decision in June that upheld other parts of the health law.

Jon Peacock, research director for the Wisconsin Council on Children and Families, said the Medicaid expansion is still "a great deal" for the state.

"The feds are going to pay the lion's share of the cost of a major improvement to the state's health care system," Peacock said. "We'll get federal reimbursement for costs that are now simply shifted to other health care consumers through hospitals' uncompensated care."

Smith said the Department of Health Services has requested an 8.9 percent budget increase for next year, largely because of increasing Medicaid expenses. Adding more people — most of them childless adults — would make it harder to balance the budget, he said.

In his testimony before a U.S. House health committee, Smith is expected to share what has happened with Wisconsin's BadgerCare program since the state implemented premiums for some enrollees in July.

The premiums, from 3 percent to 9.5 percent of income, apply to people who make more than 133 percent of the federal poverty level, or $25,390 for a family of three. Under the health reform law, many of them are expected to face similar premiums in buying insurance on exchanges, private insurance marketplaces in each state.

About 77 percent of BadgerCare enrollees required to pay premiums are paying them, Smith said. But for those making between 200 percent and 300 percent of the poverty level, who face an average monthly premium of $207, more than half have dropped out of the program.

For people who make even more, who face an average premium of $500, two-thirds have stopped coverage, he said.

Many such people will qualify for federal subsidies in buying insurance through the exchanges, but Wisconsin's experience suggests some might instead forgo coverage and pay the smaller penalties for doing that, Smith said.

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