MADISON, Wis. -

Republican Gov. Scott Walker is rejecting a voluntary Medicaid expansion for Wisconsin under federal law.

Walker said he won't expand Wisconsin's Medicaid services, known as BadgerCare, to 175,000 childless adults as the federal health care overhaul law allows.

"My goal in looking at this is two things," said Walker at Wisconsin Manufacturers and Commerce's Business Day in Madison. "One, I want to have fewer people in this state who are uninsured, but along with that I would like to have fewer people in this state who are dependent on the government."

Instead, on Wednesday Walker announced a hybrid approach that he said will drop the state's uninsured non-elderly adults from 14 percent to 7 percent.

Walker's plan would tighten the income threshold to qualify for Medicaid, but also lift the cap on a program that covers childless adults. It would allow thousands of childless adults onto BadgerCare but push thousands of others off the program and into new federal health care exchanges. Walker said the net effect would be 224,580 more people in the state would be insured.

"The more people we get into private insurance and into the exchanges, the more latitude they have over what happens in their lives and the lives of their families," Walker said. "In the end, it's a way for us to manage our cost and a way to move people off what routinely has been a heavily driven government subsidy, which is Medicaid."

But health care advocates and Democrats are calling the decision puzzling, short-sighted and even reckless.

"If this is WalkerCare, I think it's something I would urge the Legislature to walk away from," said Bobby Peterson with ABC for Health.

Peterson argues that accepting the federal money would have moved 175,000 people onto BadgerCare at minimal cost to the state.

"This is not the middle ground," said Peterson. "The middle ground would have been to extend and expand coverage for people in Wisconsin."

"Some will portray this as not caring about people," said Walker on Wednesday. "I think it's just the opposite. I care too much about the people of this state not to empower them to control their own destiny."

"It sure doesn't look that way," Peterson said. "It sure smells like politics and it doesn't look like a caring governor reaching out to help the least fortunate in our state."

The budget proposal will not only need approval by the Legislature but also the federal Center for Medicaid Services.

Walker was among the last Republican governors to decide whether to move forward with the expansion. Six Republican governors have agreed to the Medicaid expansion.

Wisconsin's hospitals and many medical and health advocacy groups had urged Walker to accept the federal money to pay for the expansion of services.

Walker is an opponent of the health care law and has already decided not to create a state-run marketplace for insurance providers.